Policy Gap Favors Further Swiss Franc Losses vs Euro – MUFG

MUFG’s Lee Hardman highlights a persistent policy divergence that is driving the Swiss franc lower against the euro. EUR/CHF has been printing fresh highs as the interest-rate gap between the two currencies widens.

The Swiss National Bank’s comparatively dovish stance contrasts with the European Central Bank’s tightening path, fueling a shift in yield differentials that weighs on the franc. Hardman suggests this policy gap will continue to favour euro gains.

With no imminent change in monetary trajectories, the franc is expected to remain under pressure, opening room for further upside in EUR/CHF in the near term.