Barclays reiterated its view that the Swiss franc is likely to strengthen gradually, despite the Swiss National Bank's dovish stance at its March meeting. The investment bank highlighted that the SNB is not eager to blunt the currency's appreciation by resorting to negative interest rates or by undertaking significantly larger foreign exchange interventions.
Analysts at Barclays observed that recent SNB comments referring to a "higher willingness" to intervene in FX markets should not be read automatically as a pivot in the central bank's policy orientation. The firm said those statements appeared to be a response to market conditions that favored larger safe-haven flows, rather than a signal that the SNB plans to change its core policy approach.
Barclays also pointed to current account developments as evidence that the Swiss economy has so far absorbed the exchange-rate shock without severe disruption. According to the bank, these current account trends imply only limited overvaluation of the franc at present, which in Barclays' view does not remove the prospect of further appreciation.
The bank noted that the SNB's broadly unchanged reaction to stronger demand for safe assets continues to be consistent with persistent CHF strength. Even though the central bank held a dovish lean at its March meeting, it maintained a cautious posture on currency intervention, declining to adopt more aggressive measures.
Barclays emphasized that the SNB's reluctance to deploy more forceful policy tools - such as deeper negative rates or significantly amplified FX intervention - remains a central factor underpinning the bank's outlook for the franc. The investment bank's projection assumes that the SNB will largely continue its present policy stance amid ongoing safe-haven demand for the Swiss currency.
In sum, Barclays' view is that a combination of resilient current account metrics, persistent safe-haven flows and the SNB's measured approach to intervention supports a scenario of gradual franc appreciation despite the central bank's dovish signals at its March meeting.