The EUR/CHF rate could be set to return to 0.9400 as low volatility favours franc-funded carry trades, while its quarterly path points to 0.93.
The Euro to Swiss Franc (EUR/CHF) exchange rate held close to 0.9350 on Friday as ING argued that subdued volatility could renew demand for franc-funded carry trades.
The pair traded at 0.9349 in the afternoon, little changed on the day after gaining 0.9% over the preceding month.
EUR/CHF one-month exchange rate performance to 21 August 2026.
ING’s latest FX Daily treated 0.9400 as a tactical destination rather than a dated quarter-end target.
Chris Turner, the bank’s global head of markets and regional head of research for the UK and CEE, said the franc could become the market’s “preferred funding currency”, sending EUR/CHF back to 0.9400.
That level is a retest only around 0.5% above Friday’s 0.9349 reference, not a distant or dated destination.
The argument rests on low volatility and a risk-friendly backdrop sustaining demand for higher-yielding assets financed in francs.
That would leave the yen less attractive as the market’s main funding currency; OCBC separately linked the shift to potential Japanese intervention risk.
Tactical EUR/CHF Level Differs From Quarterly Path
ING’s current forecast table, updated separately on 11 August, places EUR/CHF at 0.93 for both the third and fourth quarters of 2026.
It then points to 0.92 at the ends of the first and second quarters of 2027, before a recovery to 0.94 by late 2027.
The distinction matters: Friday’s analysis identifies a tradable move towards 0.9400, while the maintained quarterly path implies that any rebound may not be sustained into year-end.
OCBC offered a firmer medium-term comparison on 13 August, placing its year-end target at 0.94 against ING’s 0.93 fourth-quarter level.
Strategists Sim Moh Siong and Christopher Wong said the franc had moved “closer to our year-end EUR/CHF target of 0.94” and described it as a “preferred funding currency for carry trades.”
Policy settings reinforce the funding case.
The Swiss National Bank kept its rate at 0% in June and said: “If necessary, we have an increased willingness to intervene in the foreign exchange market. We thereby counter a rapid and excessive appreciation of the franc.”
The European Central Bank meanwhile held its deposit rate at 2.25% in July, preserving a positive euro-franc rate gap.
That rate gap favours the euro, but ING’s 0.92 levels for the first half of 2027 show that the tactical carry argument is not the same as a lasting bearish-franc call.
For EUR/CHF, 0.9400 is therefore the immediate test, with 0.93 remaining ING’s separate quarter-end reference.
Our currency coverage draws on live market data, official economic releases and published bank research.
