EUR/CHF: Tough times for the SNB - ING

The Swiss franc has surged amid global equity turmoil and waning confidence in the dollar. With the SNB likely to cut rates reluctantly in June and FX interventions constrained by U.S. trade threats, the franc may stay firm -- though Q2 risks remain if risk assets continue to slide, ING's FX analysts Francesco Pesole and Chris Turner note.

CHF shines as markets seek non-dollar haven

"The sharp sell-off in global equity markets and the search for a non-dollar safe haven has seen the Swiss franc perform very well. The Swiss National Bank faces the twin challenges of a) reluctantly cutting the policy rate to 0% when it meets in June and b) facing constraints on FX intervention."

"One of the reasons the CHF may be doing so well is the intervention story. Washington's key call to trade partners is to stop preventing your currencies from appreciating. Switzerland briefly faced a 31% 'reciprocal' tariff and could be bounced back there if it undertakes persistent FX intervention."

"We see downside risks in the second quarter if risk assets remain vulnerable."