European currencies are having a fantastic year, with the CHF, the Euro, and GBP achieving their best performance since the early 2000s.
With US President Trump doing everything he can to devalue the US dollar (tariffs, beefs with other countries, menacing the Fed’s Independence, and Jerome Powell), and on the other side of the Atlantic, EU countries allying to boost productivity in the years to come, the conditions for such outperformance are optimal.
Regarding basic economics, one thing to watch for Europe and Switzerland could be a too-strong currency, which would impair exports in an already-cooling economy (and crippled with 39% tariffs with the US).
In fact, Switzerland has been in deflation since May 2025. While its economy continues to grow slowly, such economic activity is not expected to hold up much given the recent SNB dovishness.
UPDATE: New yearly lows recently got reached in a bearish acceleration – The US Dollar is really not liking Miran joining the FOMC committee right before the beginning of the Meeting!
In the current state of geopolitics, participants looking for safety have had enough of a yen that loses too much in Carry due to historically low rates and have come back to the Swissie in search of value amid a less-competitive dollar.
