On January 15, 2015, the Swiss National Bank discontinued its minimum exchange rate of CHF 1.20 per euro. This was a floor for EUR/CHF: a policy commitment that could be changed. The article explains the intervention tools, the direction of the quote and the account exposure to a hypothetical price gap.

Safe-haven characteristics depend on the comparison

A currency quote compares two currencies. Falling EUR/CHF means CHF strengthens against EUR; USD/CHF can behave differently because USD also responds to the setting. Grisse and Nitschka’s official 2013 SNB research summary finds safe-haven characteristics against many, but not all comparison currencies, with a relationship that changes over time. That dated research is not a forecast that fear must strengthen CHF against every currency or make leveraged positions safe.

A stronger franc can affect exporters’ foreign-currency pricing and domestic margins, depending on their contracts and costs. Avoid equating a gross export total with a share of all Swiss production. The SNB’s price-stability mandate is broader than a permanent obligation to weaken its currency.

The 1.20 floor and its defence

The SNB introduced a minimum exchange rate of CHF 1.20 per euro on September 6, 2011. A minimum EUR/CHF quote means defending against the euro falling below that level in franc terms. The commitment was later discontinued; it was not an unprecedented permanent law of exchange rates.

In the SNB’s explanation, buying foreign currency against CHF adds foreign-currency investments to its assets and credits banks’ sight deposits in CHF. Selling works in the opposite direction, other things equal. These are accounting effects, not a proportional exchange-rate prediction. The ability to create francs does not make a policy commitment permanent or establish that the bank always intends to weaken CHF.

The dated 2015 policy change and quote percentages

The January 15, 2015 statement explained that the minimum rate had been introduced during exceptional overvaluation and that policy divergence had changed the circumstances. It discontinued the commitment and stated that the SNB would remain active in foreign exchange as necessary. This official explanation does not establish that one future ECB programme alone determined the outcome.

For a hypothetical quote change from 1.20 to 0.85, EUR/CHF falls by (0.85 / 1.20 − 1) × 100, approximately 29.17%. The reciprocal CHF value in euros rises by (1.20 / 0.85 − 1) × 100, approximately 41.18%. These are different percentage calculations, not verified price observations from a specified venue on January 15, 2015.

Negative-balance protection depends on the applicable regime, client classification and contract. ESMA’s 2018 EU retail-CFD intervention limited aggregate liability to funds dedicated to the relevant CFD account; that is not a rule for every jurisdiction, professional client or instrument, nor proof of what a particular 2015 client owed. See watching the major central banks for the broader policy context.

Negative rates and ongoing intervention

On January 15, 2015, the SNB reduced the interest rate on sight-deposit account balances above an exemption threshold to −0.75% and lowered its three-month Libor target range to −1.25% to −0.25%. These are the instruments named in that historical announcement; do not relabel them as the later SNB policy-rate instrument or assume they describe current rates.

The SNB can buy or sell foreign currency against CHF for monetary-policy purposes. Use the published intervention series to identify the measure and period; sight deposits and reserve balances alone also reflect other operations and valuation effects. In Japan, the Ministry of Finance decides foreign-exchange intervention and the BoJ conducts it as agent, a distinction explained in the yen-policy article.

SNB’s FAQ says the volume for the previous quarter is disclosed at the end of each quarter. Keep the measure, unit, reference quarter and publication timestamp; a subsequently published value was not known before its release. Sight deposits also change through repo and SNB Bills operations, while foreign-currency investment values reflect income and valuation. A weekly balance change alone does not identify intervention amount or direction.

Net purchases do not reveal gross turnover

A bank can buy and sell currencies. For two invented ledgers, assume the same CHF valuation unit and constant prices. Both show net purchases of 10, but only the first also has a gross transaction total of 10.

Scroll sideways to see the full diagram

Net purchases and gross turnover in two invented ledgersLedger A buys 10 and sells 0: net 10, gross 10. Ledger B buys 60 and sells 50: also net 10, but gross 110. Purchase and sale bars share a scale of five pixels per unit.Same net amount, different gross totalCurrency salesCurrency purchasesLedger A+100Net: 10 − 0 = 10Gross: 10 + 0 = 10Ledger B−50+60Net: 60 − 50 = 10Gross: 60 + 50 = 110Both ledgers: the same CHF unit
Net purchases subtract one direction from the other. Adding purchases and sales answers a different question: the combined value of all operations.

Net alone cannot reconstruct gross turnover, order counts or their sequence. Record the measure's name, unit and period before comparing reports. This accounting distinction does not predict CHF's reaction.

Assumptions: Values 10, 60 and 50 are invented CHF units. All transactions are valued at constant prices; income, asset revaluation and other balance-sheet movements are excluded. The diagram does not represent an actual SNB quarter. Official material: SNB — currency transactions as a policy instrument.

Calculate exposure from actual hypothetical fills

For our hypothetical EUR/CHF long, buy EUR 10,000 at Ask 1.2000 using a CHF account with CHF 5,000 equity before entry. Set an ordinary stop at Bid 1.1900 and assume CHF 2 total commission. There is no funding or conversion. Each alternative assumes a complete close at the listed Bid, with no earlier margin liquidation; no real provider execution is promised.

Different hypothetical exit fills, same EUR 10,000 position
Entry Ask 1.2000 CHF/EUR; CHF 2 total commission
Exit BidPrice resultNet CHFLoss / starting CHF 5,000
1.1900−100 CHF−102 CHF2.04%
1.1000−1,000 CHF−1,002 CHF20.04%
0.9600−2,400 CHF−2,402 CHF48.04%

Net is (exit Bid − entry Ask) × 10,000 − 2. The execution prices already include spread, so do not subtract it twice. IG UK’s CFD documentation explains that an ordinary stop may fill worse than its trigger. This table neither reconstructs 2015 clients nor predicts a broker’s stop-out sequence. Negative-balance protection is a separate account-liability mechanism, not a per-trade loss budget or guaranteed stop fill.

A currency regarded as stable can still be exposed to an unexpected policy change. Position sizing and leverage affect the account impact, and historical calm does not provide a price guarantee. Read the ECB decision article for the other side of EUR/CHF without assuming ECB policy alone sealed the floor’s fate.

What balances and recent calm cannot establish

Do not treat a policy commitment or recent low volatility as a permanent boundary. Assess leverage and possible gaps using your own position. Compare CHF with other assets over an identified period, rather than assuming it always moves together with gold, USD or JPY.

Our balance test: a higher asset value need not mean a purchase

Start with CHF 500 billion in invented asset values and ignore interest/dividends. In A, there is no purchase or sale but the unchanged portfolio’s CHF valuation rises 10%. In B, valuation is unchanged while assets of CHF 50 billion are bought.

Same balance change, two different fictional causes
Measure, CHF billionA: revaluationB: purchase
Opening balance500500
Valuation change+500
Net purchases0+50
Closing balance550550
Balance difference+50+50

Both finish at 550, yet net transactions are zero in A and 50 in B. The 10% refers to the whole portfolio’s CHF valuation; it is not a reciprocal exchange-rate calculation. This does not estimate actual SNB reserves or intervention. Record asset balances, income/valuation and reported transactions separately. If only two balances are known, describe the value change rather than assigning it to currency purchases.

What now

  1. Calculate alternative fills. State the pair, quote direction, position, account currency, entry, exit and costs. Use the article’s EUR 10,000 model to compare planned-stop and worse-fill losses. Keep the no-earlier-liquidation assumption explicit; these scenarios are neither verified 2015 prices, their probabilities nor maximum possible losses.
  2. Verify the applicable negative-balance protection. Identify the legal entity, jurisdiction, retail or professional classification, instrument and relevant account funds. Read the agreement together with the applicable rules; do not equate protection with every deposit ever made or assume a 2015 scenario has the same legal outcome today.
  3. Read the reported intervention measure. Check the SNB’s published foreign-exchange transaction data and its reference quarter. Sight deposits can change through repo and other liquidity operations, so a weekly jump alone does not identify intervention volume or direction.
  4. Compare assets as an observation exercise. Use matching timestamps and distinguish each quote’s direction when comparing USD/CHF, gold and yen pairs. Record whether they moved together in that sample; do not assume a fixed correlation or infer the cause of a move from co-movement alone.