Morgan Stanley Forecasts Further CHF Strength Amid Rising Safe-Haven Demand

Key Facts

1EUR/CHF broke below key support at 0.92 at the start of the year.

2Morgan Stanley forecasts EUR/CHF to fall to 0.87, below consensus and forwards.

3CHF is viewed as the most consistent and effective safe haven in the G10 space.

4RBC believes FX intervention by the SNB is likely over the next year, but timing remains a challenge.

The Swiss Franc (CHF) is demonstrating significant strength at the start of the year, with the EUR/CHF pair breaking below the critical support level of 0.92. Analysts at Morgan Stanley highlighted that the CHF remains the most consistent and effective safe-haven asset within the G10 currency space, forecasting the pair to fall to 0.87. This bullish outlook for the franc is primarily driven by escalating geopolitical risks and heightened uncertainty surrounding global trade policies. While RBC suggests that the Swiss National Bank (SNB) might intervene in the foreign exchange market over the coming year, they acknowledge that timing such a move remains a challenge. Overall, the SNB appears more tolerant of currency appreciation in the current environment than in previous cycles, cementing the franc's role as a premier hedge against global volatility.