Swiss National Bank preview: A trillion-franc quandary

The SNB spent a staggering CHF 110B on intervention to stem the appreciation of the Swiss franc in the FX market last year

Quiet session 2

It doesn’t garner as much headlines as continental rivals like the European Central Bank or Bank of England, but the Swiss National Bank has long been a bastion of conservative, prudent monetary policy for centuries. Traders are eager to see if the SNB can live up to that reputation at this week’s monetary policy meeting.

When is the SNB meeting?

Thursday, March 25 at 8:30am GMT

SNB meeting expectations

Policy rate to remain unchanged at -0.75%, the lowest rate in the world

SNB meeting: What to watch

The biggest news out of the typically-quiet central bank was a whopper: The SNB spent a staggering CHF 110B on intervention to stem the appreciation of the Swiss franc in the FX market last year. With all the uncertainty around the impact of the global COVID pandemic, traders shifted their focus from getting a return on their capital to emphasizing the return of their capital, and that led to immense buying pressure in the safe haven franc.

The Swiss National Bank now holds CHF 999B on its balance sheet, substantially larger than the Swiss economy’s annual GDP. Some analysts fear that these large holdings could limit the central bank’s flexibility or threaten its credibility moving forward, but the central bank isn’t outwardly concerned yet. According to a spokesman, "[t]he SNB has sufficient scope for expanding its balance sheet further, should this be necessary for monetary policy reasons” and that "[f]oreign exchange market interventions and the associated expansion of the balance sheet are currently a necessary monetary policy instrument and have nothing to do with currency manipulation." In other words, the SNB won’t hesitate to expand its FX market interventions if needed, though with the Swiss franc seeing the worst performance among the major currencies so far this year, it’s unlikely we’ll see any moves on that front this week.

USD/CHF technical analysis

After trending consistently lower throughout the last three quarters of 2020, USD/CHF found a near-term bottom the first week of January and has been trending higher ever since. Following a sharp 400-pip surge in a three-week window starting in mid-February, the pair has spent the last two weeks consolidating above 0.9200.

The current consolidation has alleviated the overbought reading in the 14-day RSI and all of the major moving averages are trending higher, indicating that the path of least resistance for USD/CHF is to the topside (bearish for the Swiss franc). If the SNB confirms this view with a more dovish outlook on the Swiss economy, USD/CHF could rally to a fresh 8-month high above 0.9400 in the coming days. On the other hand, a more hawkish outlook and break below last week’s low near 0.9200 would open the door for a deeper retracement toward 0.9100 in USD/CHF:

Source: StoneX, TradingView

Learn more about forex trading opportunities.

More from Forex


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.