Swiss March CPI moved away from zero, easing pressure on the Swiss National Bank (SNB) to take its policy rate below zero. This inflation reading suggests less need for deeper negative rates.
Market expectations of European Central Bank rate hikes have risen, which could widen short-term rate spreads in favour of the euro and support EUR/CHF. Even so, the move away from recent EUR/CHF lows is linked more to the threat of SNB foreign exchange intervention.
Swiss Inflation And Policy Implications
The Swiss franc is still expected to stay firm due to safe-haven and diversification flows. A further dip in EUR/CHF towards 0.90 is expected in the coming months.
We continue to see the Swiss franc remaining firm in the weeks ahead, reinforcing the view that EUR/CHF could dip toward the 0.90 area. This outlook is supported by a Swiss National Bank (SNB) that is not under pressure to cut rates and a persistent demand for safe assets. Derivative traders should position for a stronger franc against the euro.
Swiss inflation for March 2026 came in at 1.4%, which keeps the SNB from considering more drastic rate cuts like those feared back in 2025. This allows the bank to rely on the credible threat of foreign exchange intervention, a tool it has used effectively to manage the franc’s strength. The latest central bank data from February 2026 showed a minor increase in foreign reserves, indicating the SNB remains an active, watchful presence in the market.
Persistent safe-haven demand is also a key factor, as ongoing global trade frictions and political uncertainty in Europe are encouraging diversification flows into the franc. We saw a similar dynamic when the pair tested the 0.94 level in late 2025 before the SNB stepped in with stronger verbal warnings. This history suggests the central bank is more focused on preventing euro strength than fighting a gradually stronger franc.
Options Strategy For EURCHF
Considering this, buying EUR/CHF put options with expirations in the third quarter of 2026 appears to be a sound strategy. These positions would profit from the expected grind lower towards our 0.90 target. Given the SNB’s potential to curb extreme upside volatility, traders might also consider put spreads to lower the initial cost of positioning for this downward move.
