Swiss franc remains preferred safe-haven currency

Executive summary

On October 21, 2025, the EUR/CHF exchange rate approached the 0.92 mark, reaching its lowest level since the temporary spike in 2015, when the Swiss National Bank (SNB) unexpectedly abandoned the minimum exchange rate of 1.20. The Swiss franc has recently benefited from renewed concerns about US-China trade relations, political uncertainties in France and Japan, as well as tensions in the US regional banking sector. This once again confirms the Swiss franc’s position as a preferred safe-haven currency in both the foreign exchange and capital markets. The franc’s strength was further supported by trade data released on the same day, October 21: seasonally adjusted Swiss exports rose by 3.4% in September (nominal). Exports to the US were particularly robust, increasing by 43% despite existing tariffs. This strong growth in exports highlights the healthy Swiss economy and reinforces market expectations that the SNB will avoid a short-term return to negative interest rates, which continues to support the franc.

EUR/CHF over time

Swiss franc remains preferred hedge globally, even compared to gold

Even in a global context, the Swiss franc remains the preferred safe-haven currency, particularly given the current risk-return profile of gold, which is now considered rather asymmetric. While the positive drivers for the gold price persist, the recent sharp increase suggests potential for consolidation or a temporary setback. Despite gold’s heightened importance in investment portfolios, the precious metal is still known for its volatility, lack of ongoing yield, and mixed track record as an inflation hedge. In such an environment, the Swiss franc benefits even more as a stable, liquid safe haven.

Many investors overlook the fact that gold can be subject to significant fluctuations, especially in volatile markets when profit-taking or short-term liquidity needs arise. After hitting an impressive all-time high of USD 4,380 per ounce in recent days, virtually all investors have recorded book gains on their gold positions. The October 21 correction of over 5% clearly illustrates this phenomenon and is mainly attributable to profit-taking and a somewhat stronger US dollar. Such profit-taking can trigger a self-reinforcing downward trend during periods of high prices, so more pronounced setbacks are possible. However, these corrections should be viewed as healthy consolidations within a long-term upward trend, offering investors attractive opportunities to establish or increase positions.

Development of gold price and 200-day average

Don’t fight the US Fed – but how about the SNB?

There is broad consensus among experts that, in the event of substantial franc appreciation, the Swiss National Bank (SNB) would first intervene in the currency markets before considering a return to negative interest rates. Whether it can influence the exchange rate on a sustained basis, however, is highly doubtful. Unlike the US Federal Reserve (Fed) or the European Central Bank (ECB), the SNB lacks the same degree of market-moving prowess. The stock market adage “Don’t fight the Fed” implies that investors should follow the US central bank’s monetary policy, as its control over interest rates and liquidity generally prevails in the long term. While the SNB’s measures also warrant attention, its influence over global capital flows and exchange rates remains markedly more limited in comparison.

The strength of the franc currently reflects widespread demand for safe-haven assets, especially in light of the US dollar’s recent weakness. Since the announcement of US tariff measures, the dollar has notably come under significant pressure. As a result, the Swiss franc is likely to continue appreciating both against the euro and the US dollar.

Putting the current financial market environment in a broader context

Financial markets are currently presenting investors with a complex set of challenges, as correlations between traditional asset classes have risen significantly. Nearly all asset classes are appreciating simultaneously – from riskier market segments such as heavily shorted stocks, cyclical equity indices, and high-yield bonds, to traditional safe havens like government bonds and the Swiss franc. This phenomenon is unusual, as equity rallies typically coincide with bond market declines, and gold usually benefits from broad-based uncertainty and risk aversion. This “everything rally” is being driven by a combination of high liquidity resulting from central bank interest rate cuts, economic resilience despite the risks posed by US trade policies, and solid corporate earnings, which benefit both growth assets and real stores of value like gold.

Although these complex conditions make short-term portfolio allocation and risk management significantly more challenging, they do not undermine their importance. It remains advisable to maintain a diversified investment strategy that aligns with your own risk profile and return expectations. Especially in volatile and complex market phases, the value of staying invested with discipline and consistency becomes clear. In the long term, the commitment to a well-defined strategy is crucial for investment success. A calm, disciplined approach focused on long-term objectives helps ensure the successful implementation of an investment strategy even in demanding market environments.