Communication on currency purchases of the SNB

The statistics released on Monday show clearly: the SNB continues to print francs and buys euro and dollars. The intention is to weaken the Swiss Franc. The strategy pays off - the Swiss franc recorded last week below 1.0630 and strengthened today to 1.0680. Last time that the Euro was so weak against the Swiss Franc was in June 2016 after the Brexit decision. The SNB has invested CHF 3.8 billion to influence the Swiss Franc exchange rate. The sight deposits thus rose to 539 billion Swiss francs. There were no comments from the SNB.

The franc appears to have gotten stronger over the longer term. Since mid-December, the EUR / CHF price has fallen below 1.08 and it appears to be a longer-term trend. Since the end of January, the price of the Euro has even fallen below 1.07. This development will make happy especially all the shopping tourists, people who want to buy a car or a house abroad and the 300,000 cross-border workers who work in Switzerland and live abroad. At ExchangeMarket.ch, we have noted a large number of new customer registrations and a high volume of transactions involving large amounts.

Some time ago, we cited an expert who estimated the acceptable lower limit of the EUR / CHF exchange rate to 1.06. Furthermore, the SNB would not allow the franc gain too much value. Now we have come very close to this limit in the last few days. However, the SNB is considering the whole currency situation. At the same time, attention must be paid to the fact that the euro is not only showing a weakness compared to the Swiss franc but also in comparison with the dollar. It is therefore not just a Swiss franc, but above all a euro weakness. Since SNB cannot really directly influence the euro, so the interventions are rather modest.

According to many experts, the SNB's limited interventions also indicate that the appreciation of the Swiss Franc against the euro could continue.

The goal of the Swiss National Bank is to protect the Swiss Franc against a radical overvaluation. It thus ensures the welfare of the Swiss export industry. Printing Swiss Francs increases its offer - The SNB is using those additional Swiss Francs to buy the most important currencies, mainly euro and dollar. In order to make investments in the Swiss Franc unattractive, the SNB has also introduced negative interest rates, which are currently at 0.75 percent and thus at a historical low.