Swiss Franc: Safe-Haven Appeal Capped by SNB Policy, MUFG Warns

MUFG warns that the Swiss franc’s traditional safe-haven status is being constrained by the Swiss National Bank’s policy stance. The SNB’s relatively accommodative rates and readiness to intervene in FX markets curb franc appreciation, while widening rate differentials make the CHF a funding currency for carry trades. As a result, MUFG expects the franc to remain range-bound against the euro and the dollar with limited upside during risk-off episodes. Traders should therefore temper expectations for explosive CHF rallies and consider alternatives such as gold for pure safe-haven exposure. The view implies persistent structural selling pressure on the CHF driven by yield dynamics and SNB intervention credibility.