Swiss Franc against Euro in 2024: Why is the Swiss currency gaining ground?

The Swiss Franc at Its Best Since 2015

Over the past twenty-four months, the Swiss franc has experienced a remarkable appreciation, returning to highs not seen in nearly a decade. This upward movement is expected to continue showing strength in 2024, positioning the Swiss currency as one of the most attractive safe-haven assets in the global market.

For those seeking to safeguard their savings, the current situation presents a significant opportunity. The uncertainty surrounding the European Union—characterized by geopolitical tensions, persistent inflationary pressures, and military security challenges—makes the CHF a superior protective alternative to the euro.

Inflation Differential: The Compass Guiding the Euro to Swiss Franc

One of the fundamental pillars of the Swiss franc’s strength lies in its inflation performance. While the Eurozone recorded peaks close to 10% at the end of 2022, Switzerland maintained its inflation below 3% during the same critical period. This divergence has profoundly shaped the trajectory of the EUR/CHF pair.

Although both regions have recently managed to moderate their inflationary pressures, the gap persists. Swiss inflation is around 1%, while in Europe it hovers near 3%. This approximate three-to-one ratio continues to underpin the bullish movements of the Swiss currency.

With the worst of the European energy and economic crisis seemingly behind us, it is normal for some of the capital that sought refuge in Swiss francs to begin repatriating toward euros. However, the economic fundamentals remain substantially different between the two regions.

Interest Rate Policy: The Swiss Advantage

The Swiss Central Bank has maintained its interest rates at 1.75%, a level that stabilizes the Swiss economy without scaring away investment or growth. This measured approach contrasts sharply with the restrictive stance of the European Central Bank.

The Eurozone maintains its official rate between 4% and 4.50%, levels necessary to contain the inflation that plagued the continent between 2022 and 2023. Although these rates have achieved their deflationary purpose, they are generating concerning side effects: economic slowdown, pressure on countries like Germany, and approaching recession.

The paradox is evident: to revive the European economy, rates will need to decrease. But a premature reduction could reignite inflation, which would again strengthen the Swiss franc against a euro weakened by price revaluation and capital repatriation into safe assets.

EUR/CHF Outlook for 2024-2025

The unpredictability of the European geopolitical environment complicates medium-term projections. Nevertheless, almost all scenarios favor the Swiss franc. Switzerland has a “winning hand” in nearly all possible contexts, a historic advantage that intensifies during periods of European turbulence.

Central projections suggest the Swiss franc will surpass 1.10 euros during 2024. More adverse scenarios for Europe could push the rate toward 1.15 or even 1.20 euros—levels not reached since January 2015. Conversely, genuine normalization across the continent would keep the EUR/CHF pair in the 1.00-1.05 range.

In no case does it seem likely that the franc will lose the psychological parity barrier (1.00).

Technical Analysis: Corrections Within a Dominant Uptrend

The Swiss franc chart during 2023 showed a clearly bullish trend. In 2024, two significant correction attempts have emerged—one in January, another in February—marked by volatility spikes in the moving averages.

These retracements do not indicate fundamental weakness in the CHF but are normal technical adjustments and profit-taking. Remember that many European investors used Swiss francs as a defensive barrier during the inflationary period of 2022-2023. With inflation contained, it is natural for some of these funds to migrate back into euros and other assets.

When expanding the perspective and analyzing the long-term trajectory of the Swiss franc, the picture is unequivocal: a sustained bullish trend. Approaching the 1.10 euro threshold suggests that the pair will break this resistance during the current year, supported by inflation and interest rate differentials between Switzerland and the Eurozone.

Strengths and Weaknesses of the Swiss Franc in the Current Context

Compared to other major Western currencies, the Swiss franc exhibits an exceptional profile:

Strengths:

• Inflation below 2%
• Balanced, non-punitive interest rates
• Reduced energy costs
• Controlled debt levels
• No significant military commitments
• Relatively superior performance compared to the Japanese yen, US dollar, and euro

Weaknesses:

• Growing importance of Asian markets
• Emergence of the Singapore dollar as an alternative safe-haven asset
• Rise of the Chinese yuan as a global reference currency

The Swiss franc will maintain its position as a preferred protective instrument in the coming quarters. However, international diversification into robust Asian currencies—such as the SGD and CNY—appears to be a recommended strategy for sophisticated portfolios.

Investing in the Euro to Swiss Franc Pair? Final Considerations

The bullish outlook for the Swiss franc is based on solid macroeconomic realities. It is hard to envision a medium-term scenario where the Swiss currency loses ground against the euro. European inflation triples Swiss inflation, debt has reached highs in multiple EU countries, and additional defense spending to support Ukraine is a burden Switzerland simply cannot bear.

Although the Eurozone has achieved some stabilization post-pandemic and post-invasion, these shocks are far from fully resolved. Switzerland, on the other hand, has robustly overcome these turbulences, while the euro and dollar remain trapped in uncertainty dynamics.

In this context, the Swiss franc emerges as one of the main vehicles to preserve capital amid euro volatility over the coming years. Few countries can claim such an extended legacy of stability as Switzerland, and its historical competitors—especially the yen—face considerable difficulties.

The probability balance favors a continuation of the bullish scenario: the Swiss franc positions itself as one of the most robust and reliable currencies from 2024 onward.