Every month, our Currency Watch webinar reviews the development of the exchange rate between the Swiss franc and the euro (CHF/EUR).
We aim to provide our clients with a qualitative, easy-to-understand analysis. You can attend the session live or watch the recordings directly on our YouTube channel.
We analyze raw market data without unnecessary jargon, with a clear objective: to help you anticipate franc movements and optimize your currency exchange operations.
We always keep this principle in mind: currencies are the true thermometer of geopolitics.
1. Macroeconomic Factors and Monetary Policies
The movement of the CHF/EUR pair reflects the decisions taken by monetary authorities and the respective inflation indicators for the Eurozone and Switzerland.
Following the historic peak recorded in March, observed data shows a general downward trend of the Swiss franc against the euro. This trajectory is mainly explained by the divergence in monetary policies:
- The European Central Bank (ECB): Facing inflation that reached 2.9% in the Eurozone, the ECB proceeded to raise its interest rates (as highlighted by Euribor rate trends) to contain rising prices, particularly in the energy sector.
- The Swiss National Bank (SNB): With inflation contained at around 0.4% in Switzerland, the BNS maintained its interest rates near zero.
Market Dynamics and Geopolitical Tensions
During the first half of this year, ongoing geopolitical events and conflicts led to consecutive surges in the value of the franc. Each situation of geopolitical uncertainty prompted investors to turn to the franc, considered a safe-haven asset.
However, the inflationary effect on energy prompted the ECB to implement monetary policy measures, reversing this trend.
Any tensions that may emerge today in the Middle East will inevitably reinforce this oil price inflation, naturally driving up the value of the euro.
Statistical note: This dynamic is observed specifically on the CHF/EUR exchange rate, whereas the Swiss franc maintains a distinct behavior against the US dollar (CHF/USD).
2. Short-Term Statistical Analysis: Rate Seasonality
The seasonality analysis conducted through our Forecaster software establishes a historical correlation between the current exchange rate trajectory and past historical series.
- Historical correlation: The current year’s data shows a 94% statistical correlation with the cycle observed in 2017.
- Observed trend: In 2017, the second half of the year was characterized by a progressive decline in the value of the Swiss franc relative to the euro.
Based on this historical data, there is a strong possibility of seeing further declines in the franc over the coming months. Therefore, if you need liquidity, you are more likely to maximize the value of your francs today than in the near future.
Below is the seasonality overview from our Forecaster:
3. Long-Term Structural Analysis: Institutional Positioning
The long-term analysis is based on COT Report (Commitment of Traders) data, which measures the net positioning of institutional players in financial markets. Examining this data highlights:
- A continuous accumulation of bullish (long) positions on the Swiss franc by Asset Managers and institutional investors (pension funds, insurance companies).
- Despite short-term technical retracement phases against the euro, the allocation choices of these players reflect a constant search for Swiss franc hedging.
These analytical elements indicate that the underlying structural trend of the Swiss franc remains characterized by its long-term historical stability.
Below is a graphic showing the attitude of Asset Managers over the past year on the CHF/EUR pair:
The COT Report clearly shows how Asset Managers are accumulating positions on the Swiss franc. The fact that structured entities such as pension funds and insurance companies choose to position themselves in this currency underscores its nature as a solid, secure, and valued asset from a long-term perspective.
4. Alert Features and Registration for the Next Currency Watch
To help users monitor these market fluctuations, the moneyswapp.com platform provides a completely free service to get alerted on sharp movements in the price of the franc.
On August 19, a peak in the price of the franc was recorded, and as usual, we alerted all our clients and those subscribed to the service via email.
You can also consult our dedicated daily page, which offers insights and analyses at a weekly level: EUR/CHF Forecasts – Moneyswapp
Don’t miss these updates — register for the next Currency Watch on September 25th.