Commerzbank analyst Michael Pfister asserts that the Swiss National Bank (SNB) currently has few sustainable tools to weaken the Swiss Franc (CHF) against major currencies such as the US Dollar (USD) [1]. According to Pfister, while the SNB has engaged in verbal interventions and demonstrated a swifter response, these measures do not address the core issue: the central bank's limited capacity to influence the franc's long-term direction [1].
Pfister notes that to meaningfully impact the CHF's value over the long run, the SNB would need to conduct foreign exchange interventions on a scale similar to those before 2024, involving sums around 50 billion CHF rather than just a few billion [1]. However, the SNB is reluctant to pursue such large-scale interventions due to the associated foreign currency risks and the potential increase in USD exposure on its balance sheet [1].
Additionally, political considerations play a significant role. The trade relationship with the US is described as fragile, and substantial interventions to weaken the franc could provoke a negative reaction from the US president, which the SNB would prefer to avoid [1]. An escalation in trade conflict could have serious repercussions for the real economy, further discouraging aggressive intervention strategies [1].
Overall, the analysis suggests that despite some near-term relief, the long-term bias remains toward a structurally stronger Swiss Franc, given the SNB's constrained policy toolkit and the risks associated with large-scale interventions [1].
CONCLUSION
Commerzbank's analysis highlights the SNB's limited ability to sustainably weaken the Swiss Franc due to both balance-sheet and political constraints. As a result, the long-term outlook favors a stronger CHF, with only limited near-term relief possible through current policy measures.