ARTICLE BODY

Strong Swiss franc: impact on businesses and strategies in 2025-2026

In a nutshell. In 2025, the Swiss franc remained strong against the euro, with an average EUR/CHF rate of around 0.9274 (source ECB). We are not at the extreme levels of 2015 (parity) or 2022, but pressure on exporters is real. The SNB cut its policy rate to 0% in June 2025 and declared itself ready to intervene in the foreign-exchange market. For Ticino businesses with Italian clients or suppliers, the exchange rate is a variable that concretely affects margins — and it must be managed with method, not by gut feel.

The franc in 2025: strong, but not extreme

Let's start from the real numbers, because the debate on the "strong franc" often exaggerates in one direction or the other.

ECB data on EUR/CHF tell this story:

In practice: in 2024 the euro came close to parity with the franc (0.9932 in May), then weakened again. In 2025 the average dropped to 0.9274. In 2026 we are around 0.91.

To put it in perspective: in January 2015, when the SNB abandoned the EUR/CHF ceiling, the franc touched parity at 1.00. In 2022 we were still around 0.975. Today we are at 0.91 — the franc is strong, but not a historic shock like those.

There is also another reading, supported by SECO: the real franc (net of inflation differentials) is weaker than the nominal exchange rate suggests. From 2015 to 2025 the nominal franc appreciated by around 20% against the dollar, but US inflation (+35%) was much higher than Swiss inflation (+8%), which partly erodes the competitive advantage of the exchange rate for Swiss producers. It does not mean that the problem does not exist, but that it should be read correctly.

What the SNB has done

The Swiss National Bank made six consecutive cuts of the policy rate between 2024 and 2025:

• March 2024: first cut
• June, September, December 2024: three further cuts
• March 2025: fifth cut
• 19 June 2025: sixth cut, rate at 0.0%
• 25 September 2025: rate maintained at 0%

The cutting cycle is therefore over. 0% represents the practical lower limit: going into negative territory would have undesirable effects on savers and pension funds, as already experienced before.

The SNB forecasts inflation of 0.2% for 2025 and 0.5% for 2026, with GDP growth between 1 and 1.5%. It has declared itself available to act on the foreign-exchange market if the situation requires it — but direct intervention remains an extraordinary tool, not an ordinary one.

Who suffers and who benefits

The strength of the franc is not the same for everyone. It has opposite effects depending on the position of the company:

Suffer:

• Exporters: those who invoice in euros or dollars receive fewer francs for each unit sold. The watchmaking industry is the most cited example: exports of Swiss watches recorded a fall of 1.7% in 2025 (CHF 25.6 billion total), with marked drops towards China and Hong Kong (-3.8%). The machinery industry (Swissmem) reports falling orders. Construction suffers on several fronts.
• European tourism: Switzerland becomes more expensive for tourists coming from the euro area. Overnight stays of European tourists have shown signs of weakening.

Benefit:

• Importers: those who buy goods or services abroad (Italy, Germany, France…) spend fewer francs for the same euros.
• Companies with costs in euro: foreign suppliers, rents in Italy, European raw materials — everything costs less.
• Non-euro tourists: Americans and Asians find Switzerland more accessible when the dollar or the yen are strong against the franc.

Focus on Ticino: the exchange rate with Italy

For Ticino businesses, the EUR/CHF issue is concrete and daily, because many work with Italian clients or suppliers.

Those exporting to Italy and invoicing in euros: with EUR/CHF at around 0.91, each euro received is worth CHF 0.91. When the rate was close to parity (0.99 in May 2024), the same euro was worth CHF 0.99. The difference is about 8 centimes per euro — 8% less in CHF revenue for the same volume invoiced, at the same euro prices. On significant volumes, it is a non-negligible margin impact.

Those importing from Italy and paying in euros: the reasoning is the reverse. Each euro paid costs fewer francs than a year ago. Italian suppliers have, in effect, become cheaper.

Cross-border workers remain one of the categories that structurally benefit from the strong franc: they earn in CHF and spend largely in Italy, where costs in euros are lower compared with the purchasing power of their Swiss salary.

Italian tourism in Ticino suffers instead: Ticino is perceived as expensive by Italian tourists, who find it more affordable to choose a national destination or other European destinations.

Practical strategies for SMEs with currency exposure

Those with a significant share of export or import in foreign currency cannot afford to ignore exchange-rate risk. According to Credit Suisse (now UBS), the most used strategies by Swiss SMEs are:

Financial hedging:

• Forward transactions: today's rate is fixed at which currency will be sold or bought in the future, eliminating uncertainty over a 3-to-12-month horizon.
• Participating forwards: a variant that retains some upside if the rate moves favourably.
• Currency stock purchases: when the rate is favourable, some SMEs buy foreign currency in advance for the coming outflows.

Operational strategies:

• Price in CHF when possible: the risk stays with the foreign customer, not with the SME.
• Dynamic pricing with FX clause: contracts that include automatic price revision if EUR/CHF leaves a pre-set band.
• Diversify markets: reduce dependence on the euro area by increasing the share of exports to the US, Asia or markets in different currencies.
• Localise part of production: having costs in euros (European suppliers, decentralised production) naturally reduces net exposure.

The golden rule, reiterated by all experts, is consistency: define a hedging strategy suited to the company profile and apply it systematically, do not react impulsively to every market move.

How we help

For a Ticino SME, currency risk is not just a bank problem: it is a fact that must enter financial planning and accounting. Knowing how much euro turnover is really worth, how margins behave as the exchange rate varies, and how to set up a budget that takes currency uncertainty into account — all are questions that find their answer starting from well-organised accounting and rigorous financial planning.

Fidav supports Ticino SMEs in accounting management and in financial and corporate advisory, with concrete attention to the specifics of the border territory. Read more on our accounting and financial administration and corporate and strategic advisory.

Have questions about the impact of the exchange rate on your business? Chat with us on WhatsApp at +41 79 741 02 89 or call +41 91 640 40 20.

FAQ (visible on page + FAQPage schema above)

Is the Swiss franc still strong in 2026? Yes, but not at the extreme levels of 2015 (EUR/CHF parity 1.00) or 2022. The average EUR/CHF rate in 2025 was around 0.9274 (source ECB), with the May 2026 value at around 0.91. The SNB brought the policy rate to 0% in June 2025, with availability to act on the foreign-exchange market if necessary.

Which Swiss sectors suffer most from the strong franc? The most exposed sectors are those with a high share of exports: the watchmaking industry recorded an export drop of 1.7% in 2025, the machinery and electrical engineering sector suffers falling orders, and European tourism is affected by Switzerland becoming more expensive. Conversely, importers and companies with costs in euros benefit from the strong franc.

What did the SNB do to manage the franc's strength in 2025? The SNB made six consecutive cuts of the policy rate between 2024 and 2025, bringing it to 0.0% on 19 June 2025, where it remained at the 25 September 2025 meeting. The SNB forecasts inflation at 0.5% for 2026 and has declared itself willing to act on the foreign-exchange market if necessary.

How does the strong franc affect Ticino businesses with Italian clients? Those exporting to Italy and invoicing in euros receive fewer francs for each euro received compared with the 2024 peaks. With EUR/CHF at around 0.91 vs the 0.99 of May 2024, the difference is about 8 centimes per euro: 8% less in CHF revenue for the same volume invoiced. Those buying from Italian suppliers benefit instead from the favourable exchange rate.

How does a Swiss SME protect itself from exchange-rate risk? The main strategies are: forward transactions to hedge expected export flows, pricing in CHF to transfer the risk to the foreign customer, market diversification towards non-euro areas, and foreign currency purchases when the rate is favourable. The key is consistency: define a hedging strategy and apply it systematically.