Swiss Franc Rally May Run Out of Steam as Gains Risk Irking SNB

Central bank to cap strength around 1.12, say Commerzbank, ING
SNB’s Zurbruegg reiterates willingness to intervene if needed

A 100 Swiss franc banknote rests on top of lower denomination notes in an arranged photograph in Bern, Switzerland, on Wednesday, June 6, 2018. Up for a national vote on Sunday is a measure that would upend the way financial institutions do business by forbidding banks from "creating" money through lending.Photographer: Stefan Wermuth/Bloomberg

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By Elizabeth Howcroft

August 15, 2018 at 4:00 AM UTC

Updated on

August 15, 2018 at 9:23 AM UTC

This article is for subscribers only.

The Swiss franc’s rally may be coming to an end as the currency nears levels that some strategists say will prompt the country’s central bank to step in to weaken it.

The franc has climbed 2.5 percent this month to a one-year high around 1.13 per euro as investors seek havens on fears of contagion from market turmoil in Turkey. Either these risks will subside or the Swiss National Bank will intervene to cap any further franc strength, according to Commerzbank AG and Toronto-Dominion Bank.