Swiss Franc Trend Analysis: CHF Investment Opportunities Amid Reassessment of Safe-Haven Assets in 2025

Why Has the Swiss Franc Become a Market Favorite?

Against the backdrop of tense global trade tensions, the investment appeal of the Swiss franc (CHF) continues to rise. As a traditional safe-haven currency, the Swiss franc has long benefited from Switzerland’s neutral country status and stable political and economic environment. Since 2025, amid the global risk asset sell-off triggered by Trump’s tariff policies, the Swiss franc has appreciated over 10% against the US dollar, with the USD/CHF exchange rate falling from 0.9078 at the start of the year to around 0.8 currently.

This upward trend in the Swiss franc is mainly driven by investors’ cautious outlook on the global economy. The International Monetary Fund forecasts a mere 2.8% global GDP growth in 2025, with slowing economic growth prompting capital flows into low-risk assets. Analytical institutions predict that the USD/CHF exchange rate could further decline in the coming months, reflecting widespread market expectations of the Swiss franc’s appreciation.

Swiss Central Bank Policy and Exchange Rate Linkage

The Swiss National Bank (SNB)'s monetary policy is a core factor influencing the Swiss franc’s movement. Over the past two years, the central bank has shifted from rate hikes to rate cuts. In June 2025, the SNB lowered its policy rate to 0%, marking the first time since late 2022 that it returned to zero after ending negative interest rates.

The decision to cut rates is not merely a cyclical economic adjustment but an attempt to ease the over-strong appreciation of the Swiss franc driven by safe-haven demand. Historically, the SNB experienced the famous “Swiss franc black swan” event in 2015, when it suddenly abandoned the euro/CHF exchange rate floor, causing market turmoil. This history has heightened market attention to the SNB’s statements and operational intentions regarding the currency.

In a relatively stable global market environment, the SNB has adopted a relatively passive stance in recent years. However, if risk appetite shifts again, investors should closely monitor potential interventions by the central bank.

Gold and Swiss Franc: Similar Yet Different Safe-Haven Choices

Both the Swiss franc and gold are viewed as safe-haven assets, but they differ fundamentally. Switzerland’s gold reserves amount to 1,040 tons, leading the world on a per capita basis, yet this reserve size has remained unchanged for years.

In contrast, gold, as a precious metal, has commodity attributes, whereas the Swiss franc is purely a currency. Historically, their correlation over long cycles is not significant. During relatively stable economic periods, the Swiss franc tends to move in tandem with non-US currencies, and gold does not necessarily have a perfect negative correlation with the US dollar index. However, during market panic, both tend to show clear synchronization—after the 2008 financial crisis, both experienced upward trends and peaked around 2011.

This indicates that in environments of deteriorating risk sentiment, both gold and the Swiss franc are important options for capital preservation.

Deep Impact of European Situations on the Swiss Franc

Due to geographical proximity and economic ties, the Swiss franc’s movement is also heavily influenced by European developments. The EUR/CHF experienced significant volatility in 2025: in the first quarter, the euro briefly strengthened as the European Central Bank (ECB) delayed rate cuts, pushing EUR/CHF to a high of 0.9676; but in the second quarter, with escalating US-China trade tensions and rising geopolitical risks, safe-haven demand for the Swiss franc increased, causing EUR/CHF to sharply retreat to around 0.94.

Past SNB interventions show that when large-scale capital exits euro assets, the central bank often finds it difficult to prevent the franc’s appreciation. This means that stable European conditions will limit the Swiss franc’s upside potential, while turmoil in Europe could further boost its attractiveness, especially relative to other eurozone currencies.

Medium-Term Outlook for the Swiss Franc

In the short term, the Swiss franc’s volatility is mainly driven by differences in central bank monetary policies and domestic economic data. In the long term, the core value of the Swiss franc lies in its function as a risk hedge—choosing the Swiss franc essentially means selecting a hedging tool to help portfolios remain resilient during turbulent times.

If a cautious attitude toward future global developments persists, the Swiss franc should be a necessary component of investment portfolios. Regarding USD/CHF, the market is generally bearish, with further downside expected in the near term. For EUR/CHF, if the ECB continues to cut rates, the SNB maintains interventions, or global risks intensify, EUR/CHF could further break below 0.90.

Investment Channels for Retail Investors in Swiss Francs

There are various ways to invest in Swiss francs, each with advantages and disadvantages. Interbank trading is the most common but also the most costly due to spread costs and trading efficiency issues, making it suitable mainly for long-term investors. Futures trading, such as CME commodity futures, offers leverage and two-way trading convenience but involves complexities like delivery and rollover, making it more suitable for professional investors.

CFD (Contract for Difference) trading has become the most popular among retail investors over the past decade. CFDs feature lower margin requirements, no need for rollover, and flexible trading hours. Investors can choose from major pairs like USD/CHF or EUR/CHF. Compared to futures, which have fixed specifications and trading times, CFDs provide greater operational flexibility.

Speculative traders should operate during the most active overlapping periods of the European and US sessions (from 9 PM to 2 AM Beijing time, with a one-hour delay during winter time).

Summary

The Swiss franc’s movement presents significant investment value in the current global environment. As the Fed’s rate hike cycle approaches its end and risks in the banking sector continue to surface, the Swiss franc is expected to become a key hedging tool in the coming years. Both large funds and retail traders should choose suitable trading methods based on their capital size and risk tolerance. Amid ongoing trade frictions and economic uncertainties, allocating part of the portfolio to Swiss franc assets will be a prudent investment decision.