Focus on interest rate differentials and geopolitical risks

EUR/USD (25.03.2026: 1.16)

Since January, the environment has shifted in favor of the dollar. The US economy remains surprisingly robust, while momentum in the eurozone has weakened. At the same time, the expectation of rapid interest rate cuts in the US has been pushed back, while the ECB is already in a clearer easing mode. This renewed widening of the interest rate differential has supported the dollar.

In addition, geopolitical tensions - particularly in the Middle East - are having a supportive effect on the USD as a global reserve currency. The euro, on the other hand, remains vulnerable to weak growth and political uncertainty within the eurozone.

EUR/CHF (25.03.2026: 0.92)

The franc has once again proven to be a stable anchor since November. Despite interest rate cuts by the SNB, demand for the CHF remains high, which is due in particular to the increased geopolitical risks. At the same time, inflation in Switzerland remains significantly lower than in the eurozone, which gives the SNB room to maneuver but also supports the real value of the franc.

The euro continues to suffer from weaker growth and lower attractiveness in a global capital flow comparison. Interventions by the SNB remain a possible, but currently not dominant factor.

USD/CHF (25.03.2026: 0.79)

The pair has shown increased volatility since January. On the one hand, the continued tightening of US monetary policy is supporting the dollar, while on the other, geopolitical risks and market uncertainties regularly lead to inflows into the franc.

In addition, market participants are increasingly switching between the "interest rate story" and the "risk story", which reinforces short-term changes in direction. The SNB remains loose, while the Fed could remain restrictive for longer than originally expected.

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Mimi Haas, Lic. rer.pol. HSG, M.A. in Banking and Finance HSG, Partner

_{Sources: MarketMap and Bloomberg}

_{Status:25.03.2026}