It has been noticed by the Smart Financial News app that since the Swiss National Bank unexpectedly cancelled the lower limit of the exchange rate of the Swiss franc in 2015, the overnight hedging cost of the Swiss franc has seen the largest increase in nearly 10 years. The Swiss National Bank will announce its interest rate decision on Thursday. Economists disagree on expectations, with a slight majority expected the Swiss National Bank to maintain interest rates.

It has been three weeks since the last public comments from decision makers at the Swiss National Bank. Since then, the market has been volatile and the Swiss franc has risen. Investors have been speculating about the Swiss National Bank's next steps. This has led to the cost of hedging the Swiss franc reaching its highest level since 2022 on the day before the Swiss National Bank meeting.

The overnight fluctuation rate of the euro against the Swiss franc has risen to 18.27%, its highest level since March 2023, when concerns about the global banking industry dominated market sentiment. Now, it depends on policy risk. Goldman Sachs's strategist pointed out that the Swiss National Bank may release guidance on selling foreign currencies to boost the Swiss franc.

Traders also have different opinions on whether the Swiss National Bank will take action on interest rates. The currency market expects a 70% chance of a 25 basis point rate cut on Thursday, while economists' views on the outcome are roughly divided.

Changes in options also reflect positions in the spot market, which is beneficial to the Swiss franc due to expanding short-term risk exposure. Since the end of May, the Swiss franc against the euro has risen by more than 4%, reaching the highest level in four months, as political turmoil in France has led investors to seek safe havens.