As the U.S. dollar slides and the stock market whipsaws, investors are pilling into the Swiss franc. The currency, long considered a safe haven for traders in search of respite from the current market volatility, has seen upward pressure as the greenback struggled. Compounding concerns about the state of U.S. economy and President Donald Trump’s tariffs have pushed market participants away from the U.S. dollar in recent weeks. Trump’s recent attacks against the Federal Reserve and its chairman Jerome Powell escalated investor uncertainty and gave way to a new milestone: This week, the dollar hit lows against the Swiss franc not seen in a decade. That’s created a sharp divergence in the ways to play these currencies with exchange traded funds. The Invesco CurrencyShares Swiss Franc Trust (FXF) has surged 8% in April, propelling its 2025 advance to 11%, The Invesco DB US Dollar Index Bullish Fund (UUP) , meanwhile, has dropped almost 5% month to date, and it’s down nearly 8% this year. The strong performance of the Swiss franc and euro over the past two weeks ” tells you pretty much everything you need to know about current investor risk sentiment,” said Nicholas Colas, DataTrek Research co-founder, in a Tuesday note to clients. “Capital preservation is the name of the global investment game right now.” FXF UUP YTD mountain The ETFs year to date The Swiss markets stand to benefit from the current flight to safety, market participants say. Paul Feinstein, Audent Global Asset Management CEO, called the Swiss franc “one of the most enduring safe havens.” Reports of wealthy Americans shifting assets abroad bolster the notion that the push into the Swiss franc may be more indicative of a long-term realignment than a short-term move, he added. To be sure, while the Swiss franc has benefited from what Christoph Schon called a “capital exodus,” the SimCorp principal said investors will need to reinvest the money in stocks or bonds eventually. European economies are still considered fragile, he said, so traders may have worries about investing in companies based there. Another potential issue is that playing the strength in the Swiss franc could bring its own share of risks. “Any bouts of volatility may affect the CHF’s perception as a safe haven currency,” said Larry Jeddeloh, editor of The Institutional Strategist newsletter and founder of Minneapolis-based institutional research firm TIS Group. He said he expected the Swiss National Bank to start getting more verbal about the currency’s strength, particularly after the unwinding of the Japanese yen carry trade last year rattled markets. But Feinstein said investors tend to trust the Swiss government to respond to heightened geopolitical conflict with both neutrality and caution. For the U.S., he said investors will have to wait to see if the turmoil in bond markets is enough to push Trump’s administration to change course on his contentious tariff plan, which has sent America’s financial markets on a tailspin in recent weeks. “For the remainder of 2025, the FXF ETF will serve as a key barometer for gauging the U.S.’s success —or vulnerability — in this high-stakes economic chess match,” Feinstein said. — CNBC’s Scott Schnipper contributed reporting.
