EUR/CHF: Rabobank sees safe-haven status challenged near 0.90

Swiss Franc's Performance Amid Geopolitical Tensions

Jane Foley, Senior FX Strategist at Rabobank, observes that the Swiss Franc has not met typical safe-haven expectations since the onset of the Middle East conflict. This muted performance is partly attributed to intervention warnings issued by the Swiss National Bank (SNB). Foley identifies the 0.90 mark as a significant level for EUR/CHF and anticipates the currency pair will hover near this point over the next one to three months, with SNB and policy decisions likely influencing the direction.

Franc Falls Short of Traditional Safe-Haven Status

Since February 27, just before tensions escalated in the Middle East, the Swiss Franc has ranked as the seventh strongest G10 currency. This ranking has remained consistent over the past week and even on a daily basis. Such results are unusual for a currency typically seen as a safe haven during crises, but they reflect how markets have responded to the SNB’s increased warnings about foreign exchange intervention at the conflict’s outset.

Upcoming Policy Meetings May Influence EUR/CHF

Market participants are closely monitoring the SNB’s policy meeting scheduled for March 19, looking for any indication that the central bank may intensify its intervention rhetoric. The ECB’s policy announcement, also set for that day, could impact the EUR/CHF rate, especially if the euro reacts positively to ECB guidance. For now, Rabobank maintains its forecast that EUR/CHF will remain near the 0.90 level over the coming months.

Recent Movements Around the 0.90 Threshold

Earlier today during the Asian trading session, EUR/CHF briefly dipped below the crucial 0.90 mark. A similar drop occurred on March 9, reaching the lowest point since January 15, 2015—the day the SNB unexpectedly ceased defending the 1.20 level, which triggered a dramatic appreciation of the Swiss Franc.

Market Speculation on SNB's Intervention Level

Although the SNB no longer explicitly states which exchange rate levels it monitors, there is speculation among traders that 0.90 for EUR/CHF may serve as an unofficial threshold for the central bank.

Outlook and Risks

Rabobank continues to expect EUR/CHF to stay close to the 0.90 level over the next one to three months. However, should the crisis in the Middle East intensify or expand, the likelihood of the pair falling below 0.90 would increase.

This article was produced with assistance from an AI tool and reviewed by an editor.