Commerzbank’s report analyses the Swiss National Bank’s approach towards the EUR/CHF currency pair. The SNB is expected to tolerate levels below 0.92 due to current market conditions and the stable value of the Swiss Franc. Intervention is unlikely unless a quick and intense appreciation occurs.
The report indicates no immediate need for the SNB to increase its intervention. If the EUR/CHF rate approaches 0.91 or lower, intervention discussions may become more active. Until then, policymakers might rely on the market to correct itself naturally.
Swiss National Bank Policy
We see the Swiss National Bank is letting the EUR/CHF drift, likely tolerating levels below 0.92 for now. This makes sense when we look at Swiss inflation, which held steady at 1.5% at the end of 2025, giving them little reason to act. The market seems calm, with one-month implied volatility for the pair hovering near historic lows of around 4.2%.
This suggests selling short-term volatility could be a viable strategy while the pair remains in a tight range above 0.91. However, as EUR/CHF approaches that 0.91 level, implied volatility will likely rise sharply on intervention fears. Traders could consider buying cheap, out-of-the-money put options with strikes below 0.91 as a way to position for a sudden drop and subsequent volatility spike.
We remember the price action in the third quarter of 2025 when the pair tested 0.93 and the SNB remained silent. This past inaction reinforces the idea that the central bank’s pain threshold is lower than many previously thought. This historical precedent supports the view that only a rapid, disorderly move would trigger a response from policymakers.
Market Conditions and Risks
With recent data showing Eurozone industrial production slowing more than expected, the path of least resistance for EUR/CHF may be downwards in the near term. This environment makes holding long positions in the pair risky without some form of downside protection. Therefore, purchasing puts or structuring put spreads to hedge against a drop towards 0.91 is a prudent move for the coming weeks.
