JPMorgan, Pictet Defy Consensus to Bet on More Swiss Franc Gains

(Bloomberg) — Big banks and investors including JPMorgan Chase & Co., Citigroup Inc. and Pictet Asset Management are bullish on the Swiss franc ahead of this week’s central bank meeting, defying the market consensus for a weaker currency. 

For these firms, global trade tensions will fuel demand for haven assets over the coming months, supporting the franc even as Swiss policymakers cut interest rates further. JPMorgan sees the currency gaining around 5% to 0.88 per euro by mid-2025, much stronger than the 0.94 per euro median forecast of analysts surveyed by Bloomberg.

Bets on a stronger franc go against the view that additional monetary easing and possible intervention from the Swiss National Bank will weaken the currency. Policymakers hold their quarterly meeting on Thursday and markets price roughly a 50% chance of a half-point rate cut. 

“The extreme dovishness of the SNB has not done anything to limit the Swiss franc’s outperformance,” said Daniel Tobon, head of G10 FX strategy at Citigroup. “There’s no reason to see a reversal beyond tactical trading.”

While traders see a good chance the SNB will step up the pace of easing this week, interest rates in Switzerland are still expected to fall less than in the euro area. Markets price 92 basis points of easing from the SNB by the September 2025, compared to 144 basis points expected from the European Central Bank. 

The franc has been the best-performing Group-of-10 currency bar the yen since June, as the return of Donald Trump to the White House raised uncertainty around global trade and geopolitics. It’s currently trading at 0.93 per euro, close to the strongest level since January 2015 reached last month. 

The stronger franc has raised speculation that the SNB could intervene to weaken it, given the potential deflationary impact in a moment consumer price growth is running below 1%. But for JPMorgan and AllianzGI, officials will hold off for now.

“If the Swiss economy is solid and develops well without inflationary pressure, a regular appreciation over time of the Swiss franc is perfectly fine for the SNB,” said Greg Hirt, chief investment officer of multi-asset strategies at AllianzGI. “If nothing changes, the franc will continue to appreciate against the euro.”

Also a strong currency is becoming less of an issue for the Swiss economy given the rising proportion that pharmaceutical companies play in its overall growth mix. These firms are less vulnerable to foreign-exchange fluctuations than the country’s signature manufacturers of chocolate, cheese and watches. 

Pictet Asset Management says strong growth, a long-running current-account surplus and lack of budget deficit are big reasons to buy the franc. The Swiss firm has a strategically long position in the currency against the dollar. 

“In an environment where there are growing risks of a global trade war, European weakness, and political fragmentation, you play it safe with the Swiss franc,” said Luca Paolini, chief strategist at Pictet.

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