Swiss franc to stay favourable amid safe haven allure

The Swiss franc is not often discussed, but recent geopolitical tensions and trade uncertainties have drawn investor attention to it. The key movement is in the EUR/CHF pair, which broke below the significant support level of 0.92 at the beginning of the year, suggesting that the SNB may be more tolerant of intervention. RBC notes that the CHF has been the dominant risk-off currency within the G10 and expects this trend to continue. With Trump remaining in the White House, a period of geopolitical calm seems unlikely; therefore, CHF strength is seen to persist despite weak economic data. However, they caution about the timing of potential interventions. Morgan Stanley argues that CHF strength is underestimated, forecasting EUR/CHF to fall to 0.87. They find USD/CHF shorts attractive as a hedge against a bearish USD scenario. Credit Agricole remarks that CHF is close to its strongest real levels since 2011. EUR/CHF holding above 0.91 is crucial, indicating that the SNB is closely monitoring these developments, but whether it will defend the more significant psychological level of 0.90 remains to be seen. Overall, CHF strength seems poised to continue, and investors should focus on this currency's risk-averse characteristics.