FX.co ★ Swiss Franc Strengthens to Two-Month High

The Swiss franc strengthened to around $0.798, its highest level in two months, amid shifting dynamics in the foreign exchange market. The move followed an announcement by the US Treasury that it will increase bond buyback operations to help contain borrowing costs, which had climbed to multi‑month highs. This development weighed on demand for the US dollar and lent support to the franc.

At the same time, a potential repositioning of speculative short positions from the yen into the Swiss franc may exert offsetting pressure. With US‑Japanese authorities acting to bolster the yen, traders are reportedly reallocating yen shorts into other relatively weaker safe-haven currencies, including the franc.

The Swiss National Bank (SNB) left its policy rate unchanged at 0% and is expected to maintain that level through 2027, while reiterating its preference for using foreign exchange interventions to curb excessive franc appreciation. Most economists anticipate the first rate hike in early 2028, though market pricing suggests a possible move as early as March 2027. This outlook could enhance the franc’s appeal as a funding currency for carry trades.