Expected Swiss Franc Appreciation: Will Rise Even After Three Rate Cuts

The 48 formal spot exchangeslatest report from Swiss private bank J. Safra Sarasin shows that despite the Swiss National Bank's plan to cut interest rates three times this year, the Swiss franc is expected to remain strong. With increasing demand for safe-haven assets from investors, the Swiss franc is projected to appreciate against the British pound, euro, and US dollar by the end of the year, and this trend could continue through 2025.

The bank's chief economist Karsten Junius stated that the Swiss National Bank may accelerate the easing of monetary policy. He expects rate cuts in September, December, and next March, mainly due to inflation slowing down more than anticipated.

Despite synchronous rate cuts by the world's major central banks, the long-term performance of the Swiss franc is not expected to be significantly affected. Forex strategist Claudio Wewel noted that while the franc may fluctuate in the short term, global economic uncertainty will support its trend, and the pullback in bond yields will also provide support, helping to hedge against geopolitical risks.

The bank also predicts that the Swiss franc will continue to appreciate in the coming years. By the end of 2024, the pound is expected to fall to 1.13 against the franc, and further to 1.06 by the end of 2025. The euro and US dollar are also expected to show similar appreciation trends against the franc.

As of 9:20 AM Beijing time on September 10, the exchange rate of USD to CHF was 0.8494/96, reflecting the franc's strong performance in the global currency market and this momentum is expected to continue.

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