Swiss Franc Shock Explained (2015)
The Swiss Franc Shock of 2015 was one of the most dramatic events in modern forex history. It occurred on January 15, 2015, when the Swiss National Bank (SNB) unexpectedly removed its currency peg against the euro, sending shockwaves through global financial markets.
Since 2011, the SNB had maintained a minimum exchange rate of 1.20 CHF per euro to protect Switzerland’s economy from an overly strong currency. This policy required constant intervention in the forex market. Over time, maintaining the peg became increasingly expensive, especially as the euro weakened due to economic uncertainty in Europe.
Without warning, the SNB announced it would no longer defend the peg. Within minutes, the Swiss franc surged by nearly 30% against the euro and other major currencies. Liquidity vanished, spreads widened dramatically, and prices moved faster than traders could react.
The sudden move caused massive losses for traders, hedge funds, and forex brokers worldwide. Several brokers went bankrupt overnight, while others required emergency funding to survive. Even experienced professionals were caught off guard by the scale and speed of the move.
The Swiss Franc Shock proved that central bank decisions can instantly reshape markets and reinforced a crucial lesson for traders: no strategy is risk-free, and proper risk management is essential in forex trading.
