06:47 AM EDT, 09/22/2025 (MT Newswires) -- The Swiss franc (CHF) has held firm over the past month even as global investor risk sentiment improved and equity markets hit fresh records, MUFG said.

USD/CHF briefly touched a year-to-date low of 0.7829 on Sept. 17, while EUR/CHF slid toward the bottom of its recent 0.9300-0.9400 range, the bank wrote in a client note.

Franc strength remains persistent this year and is likely to concern the Swiss National Bank because inflation is well below its 2% target, MUFG said.

The currency suffered a brief setback in mid-August after former U.S. president Donald Trump announced a 39% tariff on Swiss imports, with EUR/CHF spiking to 0.9457 on Aug. 18. Selling was driven by speculation that the higher tariffs might prompt the SNB to reconsider negative rates.

However, expectations for a return to negative rates have since receded ahead of Thursday's SNB policy meeting. MUFG noted that officials, including President Martin Schlegel, have signaled a high bar for re-imposing negative rates because of their side effects. Recent U.S.-Swiss trade talks have also raised hopes for a lower tariff rate.

As a result, MUFG does not expect this week's SNB decision to weaken the franc.