Swiss Franc: SNB intervention bias dialed down – Societe Generale

Societe Generale strategists note that EUR/CHF has rebounded about 0.3% after the Swiss National Bank (SNB) left rates at 0.0% but softened its FX intervention language. The bank now signals it is only willing to be active as necessary, with inflation forecasts around 0.7–0.8% through 2028 and a widening rate differential versus the Eurozone expected over the next three months.

Franc overvaluation allows SNB retreat

"SNB unchanged at 0.0%, monetary policy appropriate but tweaks intervention language in statement, replaces "increased willingness to intervene" by "also willing to be active in the foreign exchange market as necessary". EUR/CHF +0.3%."

"It is a more nuanced story for EUR/CHF where the rebound of 0.3% this morning (bullish outside day) follows the decision by the SNB to drop the level on intervention."

"It replaced "increased willingness to intervene" from the June statement by "also willing to be active in the foreign exchange market as necessary"."

"Put differently, the path of Swissie appreciation and overvaluation has turned to the extent where the central bank can back off."

"Average annual inflation is forecast at 0.7% for 2026, 0.8% for 2027 and 0.8% for 2028. That’s over 1pp below the ECB. The rate differential with the eurozone is set to widen by another 25bp in the next three months."