Article published in Le Temps on 9 February 2026 by Sébastien Ruche. Click here to read the article in Le Temps.
Despite last week’s rebound, the US currency still appears firmly anchored in a downward trajectory, especially against the Swiss franc. What can the Swiss National Bank and Swiss investors do?
Thanks to its recovery last week, the dollar has posted a limited decline of 0.45% against a basket of major currencies since the beginning of the year. At the end of January, it had hit its lowest level in four years after Donald Trump said he was comfortable with a weak greenback. Interpreted as a signal of a future decline in the dollar, this statement fueled confusion, as almost simultaneously Treasury Secretary Scott Bessent asserted that US policy continued to favor a strong dollar.
Still, the US currency has lost nearly 2% against the Swiss franc since 1 January. The appointment of Kevin Warsh as head of the Federal Reserve on 30 January gave the dollar some support. However, it is likely to continue to erode under the weight of US budget deficits, public debt, the weakening of institutions, and increasingly uncertain respect for the rule of law across the Atlantic. What solutions exist for Switzerland, its companies, and its investors? A few ideas.
In addition to hurting Swiss exports to the US market, this situation complicates matters for foreign investors, as the performance of US indices risks being reduced—or even wiped out—by the loss in the dollar’s value. This was seen last year, when the roughly 13% fall of the dollar against the franc significantly eroded the S&P 500’s 17% rise once translated into francs.
Not enough francs to soothe the world’s anxiety
The same phenomenon is at work in the bond market, where returns are generally lower. So even though the S&P 500 reached 7,000 points for the first time in its history on 28 January, this does not necessarily mean the rest of the world will benefit from its potential gains this year.
Yet it is difficult to stop investing in the United States, as US equities remain a source of performance, Treasury bonds continue to offer safety, and the US economy remains the world’s largest.
For Swiss investors, the context is even less favorable. Having been close to parity in early November 2022, the dollar–franc exchange rate is now hovering around 78 centimes. Some no longer rule out 50 centimes in the medium term.
This is apparently the price to pay when the qualities of Switzerland’s currency make it a haven sought by investors in times of stress. And episodes of tension have not been in short supply in recent years, while there are relatively few francs available to absorb all the world’s anxiety.
While a stronger currency protects against imported inflation, when appreciation reaches the magnitude of the franc’s strength, the risk shifts toward disinflation—or even the much-feared deflation.
Three lines of defense
For the Swiss National Bank (SNB), the first line of defense involves “discretionary interventions in the foreign exchange market,” says Nadia Gharbi, economist at Pictet. That is, operations “on a smaller scale than the massive interventions of the past,” given that “the SNB’s priority is to control the speed of the franc’s appreciation.”
Will such interventions be tolerated by the Trump administration, which on 30 January kept Switzerland on its list of countries suspected of currency manipulation? The atmosphere has changed “since a joint statement in September 2025 in which the US Treasury acknowledged that SNB interventions were necessary for the SNB to control inflation,” notes Nadia Gharbi.
Switzerland meets two of the three criteria defining manipulation in the eyes of the US administration, which nevertheless acknowledged that recent SNB interventions were “relatively modest,” at around $7 billion between June 2024 and June 2025, according to Reuters.
The importance of communication
The franc would also be less attractive to foreign investors if the SNB returned to negative interest rates, as it did between January 2015 and September 2022. “But it has set very high thresholds before getting to that point, specifying that it is ready to tolerate negative inflation in Switzerland for several months, knowing that what matters most is medium-term inflation, which must remain between 0 and 2%,” continues Nadia Gharbi, who does not expect a return to negative rates and recalls that the euro is far more important to the SNB than the dollar. The European currency represents 42% of the currency basket monitored by the institution, compared with 17% for the greenback.
A third line of defense remains: communication, “used as a lever since June 2025,” our interlocutor explains. By raising the threshold for a return to negative rates, the SNB has changed market expectations, which have stopped pricing in a rate cut. Ultimately, the best scenario for the franc would include a stabilization of the global geopolitical situation or an economic recovery in the eurozone driven by Germany’s fiscal stimulus program, concludes Nadia Gharbi. Or even, “in the longer term, a rate hike by the European Central Bank—but that is not what we are forecasting for 2026.”
Beware the next episode of stress
Michel Dominicé, for his part, believes in a return of negative rates. The Geneva-based financier says he is wary of the dollar for two reasons. First, Switzerland continues to post a current account surplus of around 7% of GDP: “The imbalance will deepen between Swiss residents, who already hold more assets abroad than foreigners hold in Switzerland. In times of financial stress, Swiss players sell their foreign assets to return to francs, which strongly supports the Swiss currency.”
We are currently in a period of euphoria, with markets at historical highs, “but in the next episode of tension, we could see a surge in the franc and a collapse of the dollar—that’s when we’ll see negative rates again,” Michel Dominicé argues.
Second, the dollar’s decline will continue due to the inflation differential between the United States and Switzerland: “The dollar–franc exchange rate has barely moved over the past 10 years, staying between 90 and 95 centimes, but during that period the United States experienced inflation that Switzerland did not. This accumulated inflation has not yet been offset by a decline in the dollar against the franc, which gives a strong reason for the greenback to fall to 70 centimes,” explains the head of asset management firm Dominicé & Co.
Maybe hedge and forget about bonds
How should one invest under these conditions? One solution is to hedge dollar exposure, which currently costs around 4%. In any case, one should forget about bonds—especially in francs—since they yield almost nothing, and look for substitutes that are neither equities nor correlated with them, Michel Dominicé continues. That means real estate, commodities, alternative funds, or catastrophe bonds. Emerging markets are also the asset class most unanimously recommended by the consensus of observers at the start of the year.
When choosing which companies to invest in, a new reality must be managed, the financier concludes: “Economies have become more stable, with less variation in growth over time, but at the same time, technological shifts are causing business models to disappear and new ones to emerge. The challenge is to identify who will benefit from these transformations.”
For example, guessing which company will develop a miracle battery for electric vehicles. A game that has become more complex because corporate trajectories are faster than before—“Nvidia, the world’s largest market capitalization, was unknown 15 years ago, while Nestlé, despite operating in a stable sector, is going through a difficult period,” Michel Dominicé notes.
