Morgan Stanley
2026 FX Outlook: The Year of Pivots
LIVE20 November 2025USD bearish
Back to CurrenciesBearish
USD/CHF
Safe haven premium erodes
MS Forecast Path
Cross-Firm Forecast Comparison
Key Drivers
European growth
SNB policy
Risk appetite
REER mean reversion
Reserve flows
All Firm Targets (Dec '26)
JPMTactically Bearish0.80
INGNeutral0.78
BARCNeutral0.78
GSModerately Bullish0.76
MUFGModerately Bearish0.76
BofAModerately Bullish0.76
MSBearish0.75
DBBullish0.75
Key Issues for 2026
1.CHF safe-haven premium to decline as European growth broadens
2.SNB accommodative stance with negative real rates
3.REER overvaluation of 15-20% supports mean reversion
4.Use CHF as funder for carry trades in G10
5.Reserve diversification demand fading as central banks normalize
Risk Scenarios
Bear case0.72-0.74
Global risk-off, European recession, safe haven demand surges
Base case0.75-0.77
European growth broadens, SNB stays accommodative
Bull case (CHF weak)0.80-0.82
Strong global growth, risk appetite surge, carry trade boom
Analysis Summary
CHF to weaken as European growth broadens and risk appetite improves. SNB expected to remain accommodative. EUR/CHF to rise as safe-haven premium erodes. Swiss franc overvaluation on REER basis supports mean reversion.