市場分析

Swiss Franc Surge Amid Tariff Uncertainty Puts Pressure on SNB to Intervene

Mellissa · 23 Apr26.1K 閱讀

Image Credit: Reuters

The Swiss franc's sharp appreciation amid uncertainty over U.S. policies is increasing the likelihood of intervention by the Swiss National Bank (SNB), as concerns grow about its impact on Swiss industry. The franc has surged about 9% against the dollar this month, marking its largest monthly gain since the 2008 financial crisis. Last week, it reached its strongest level since January 2015, when the SNB abandoned its minimum exchange rate. In April, the franc rose 2.6% against the euro, nearing its highest level in more than a decade.

The rapid rise of the franc, driven by fears surrounding U.S. President Donald Trump's trade policies, is putting pressure on the SNB’s inflation target. As the franc strengthens, it reduces the cost of imports, which could push inflation even lower, already near zero. Additionally, Swiss exporters could face significant challenges due to the higher cost of their goods, especially with the looming threat of 31% U.S. tariffs.

Jean-Philippe Kohl, vice director of Swiss industry association Swissmem, described the combination of a strong franc, weak global demand, and U.S. tariffs as a "poisonous cocktail" for Swiss companies. While Swissmem has not called for direct action from the SNB, Kohl indicated that any steps taken by the central bank to curb the franc's rise would be welcomed.

Analysts suggest that interventions, rather than rate cuts, are likely the SNB’s most effective tool, as the central bank’s key rate is already at 0.25% and is expected to decline further. Thomas Stucki, former head of asset management at the SNB, noted that during times of high uncertainty, interest rates become less relevant, and interventions might be the preferred option. In 2023, the SNB sold foreign currencies worth nearly 133 billion francs to prevent excessive inflation, but now it may need to reverse course and sell francs to weaken the currency.

The risk of the U.S. government labeling Switzerland a "currency manipulator" remains a concern, as it did during the Trump administration in 2020. Chris Turner, global head of markets at ING, pointed out that market uncertainty over the SNB’s ability to conduct large-scale foreign exchange buying is a factor driving the franc’s strength.

The SNB has maintained that it does not engage in currency manipulation and only intervenes to maintain price stability. It has also stated that it may resort to negative interest rates again if necessary, although this would be unpopular with Swiss banks, savers, and pension funds, making interventions appear more manageable.

UBS economist Maxime Botteron suggested that the SNB might already be engaging in limited sales of francs but did not expect sustained intervention. "Interventions are more flexible than interest rate cuts," he explained. "The SNB can enter the market, sell francs to ease the appreciation, and then stop."

The SNB has declined to comment on the franc's recent rise or how it plans to respond. Policymakers are particularly concerned with the franc’s performance against the euro, given that most of Switzerland's trade is with the eurozone. In 2023, 57% of Swiss imports were priced in euros, compared to just 13% in dollars, making the franc's strength against the euro a key factor in determining inflation.

The SNB has said it does not focus on individual currency pairs but rather on a basket of currencies when formulating policy. However, as the real effective exchange rate of the franc hits post-2015 highs, Swiss Re’s Patrick Saner believes intervention is increasingly likely. "The speed and scale of the recent rally, particularly since April 2, makes it more probable that the SNB will act to protect price stability if the situation worsens," he said.