The Swiss National Bank is no doubt one of the central banks that surprised rather on the hawkish side over the past year. Esther Reichelt, FX Analyst at Commerzbank, expects the SNB to remain committed in its fight against inflation, capping EUR/CHF upside.

The Swiss Franc is standing up well.

“Despite a generally cautious rise in inflation to ‘only’ 3.5% the SNB hiked interest rates decisively and signalled further rates hikes. A further rate hike in March seems certain. The Franc was able to benefit from this determination over the past days.”

“In view of the upside risks for US interest rates the market seems to be speculating on the SNB not wanting to fall behind a monetary policy remaining tighter for longer on a global basis.” 

“SNB is likely to remain alarmed for now, which makes the upper end in EUR/CHF less attractive due to the risk of FX market interventions.”