The Swiss National Bank (SNB) states that Switzerland is not engaging in currency manipulation. The actions taken are meant to reduce the Swiss Franc’s overvaluation to maintain price stability, rather than to secure trade advantages. Technical experts in the US reportedly understand this position.

Although Switzerland has used negative interest rates in the past, the SNB does not favour them. However, it admits that such measures might be required again. Alongside the Bank of Japan (BoJ), the SNB remains one of the most active central banks in intervening in currency markets.

Currency Manipulation Definition

A currency manipulator is defined as a country that alters its exchange rate to gain undue benefits in global trade. The SNB and BoJ’s interventions are focused on price stability, not manipulation for trade advantages. Comments on negative rates have been consistent over recent months.

What the current article tells us, in clear terms, is that the Swiss National Bank is actively working to keep its currency from being too strong, but not for the reasons some might assume. Their intent isn’t to push exporters into a more favourable position or gain a better trade balance. Instead, they’re trying to keep inflation in check. The franc has a tendency to strengthen quickly when global uncertainty rises, and when that happens, domestic prices risk falling too much. That’s harmful.

Regarding interest rates, although they’ve gone negative before, the preference remains not to use them unless circumstances demand it. It’s more of a tool kept for emergencies than a first choice in policy. By positioning themselves carefully, both the Swiss and Japanese central banks are signalling that stability matters more than competitive advantage in trade. This sets them apart from jurisdictions that might lean toward more aggressive devaluation strategies.

Now, when we read between the lines, this matters for those of us trading interest rate futures, FX options, or volatility products tied to these currencies. Whether we’re modelling carry plays or defining skew based on central bank paths, these cues help frame the risk. If negative rates are back on the table, even if not likely in the short term, the floor for terminal rate assumptions can’t sit too far above neutral. This directly impacts forward guidance expectations and pricing through the 2-year part of the curve.

Swiss Franc Derivatives Pricing

Jordan’s tone remains aligned with previous statements, which means no surprise directional shifts are imminent. But heavy currency involvement always injects short-term noise. In risk terms, that tells us to be cautious about sharp reversals driven by policy commentary rather than fundamental flows. For longer-dated trades in the Swiss franc, a neutral to mildly dovish stance may still be embedded in derivatives pricing. Short-term positioning should account for the likelihood of temporary spikes in realised volatility driven by interventions or market misunderstandings.

We also shouldn’t overlook the indirect signal being sent to other monetary authorities. If this level of transparency continues, we may see slower reactions from speculative flows that traditionally expect central banks to “blink.” That ultimately lowers the chances of chasing abrupt moves at the margins, making liquidity easier to manage across time zones.

So, in the next few weeks, it’s sensible for us to review hedging ratios, particularly those tied to vega risk near key data prints. Our implied expectations may be lagging if they’re based on policy inertia. The messaging is more deliberate now—and small moves will be defended quickly. Not with surprise, but with steadiness. That matters when shaping exposure in Swiss franc pairs especially, where traditional fundamentals often don’t explain half the move.

Finally, for those operating in the volatility space, this atmosphere presents more steady ranges than cliff-edge action. If convexity plays are part of the approach, adjustments may be needed to reflect lower expected snapback alongside persistent intervention tones.

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