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    Swiss sight deposits fell to CHF 465.9 billion due to adjustments after a policy change.

    by VT Markets
    /
    Aug 11, 2025
    As of the week ending on August 8, 2025, the Swiss National Bank (SNB) has total sight deposits of CHF 465.9 billion. This is a drop from CHF 468.5 billion previously. Domestic sight deposits saw a bigger decline, decreasing to CHF 437.1 billion from CHF 493.5 billion. This drop follows an earlier rise due to the SNB’s new approach to sight deposits after the June meeting.

    SNB’s Neutral Policy Stance

    The ongoing slight decline in SNB sight deposits indicates that the central bank is taking a neutral stance. They are not buying foreign currency to weaken the Swiss franc. This reinforces the neutral policy they adopted after the June meeting. This approach is supported by current economic conditions. As of July 2025, Swiss inflation remains steady at 1.8%, comfortably within the SNB’s target range of 0-2%. This stability gives them little reason to change policies, especially since the European Central Bank has begun rate cuts, which tends to strengthen the franc. For traders dealing with derivatives, this indicates low volatility in franc currency pairs. One-month implied volatility on EUR/CHF options has dropped to 4.5%, nearing the multi-year lows from early 2024. This environment favors strategies like short strangles, allowing traders to earn premiums from market stability.

    Strategic Trading Opportunities

    The SNB’s inaction effectively supports the franc, especially as EUR/CHF trades below the 0.9700 level. Traders may want to buy short-dated, at-the-money call options on the CHF against the EUR. This is a cost-effective method to position for a stable or gradually strengthening franc, as the SNB seeks to control imported inflation. We are now in a different phase compared to the heavy interventions seen after 2015. After cutting rates in March 2024, the SNB seems happy to wait. In the coming weeks, the emphasis will likely remain on a gentle reduction of liquidity rather than active currency manipulation. Create your live VT Markets account and start trading now.

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