TD Securities: Swiss Franc Weakness Due to Carry and Gold After Iran Shock

TD Securities strategists have identified two key drivers behind the Swiss Franc’s persistent underperformance since the February 2026 Iran shock. They argue that the currency’s low yield makes it an attractive funding vehicle for carry trades, weighing on its value. At the same time, its historical sensitivity to gold prices has also contributed, though no further details were provided.

The note highlights that the CHF has struggled in the aftermath of the geopolitical event, reflecting broader risk-on dynamics and yield-seeking flows that typically hurt low-yielding safe havens like the franc.

TD Securities’ analysis suggests these themes may continue to drive CHF weakness in the near term unless a shift in risk sentiment or central bank policy alters the landscape.