Daily surges in the past week have taken the Swiss franc to its highest against the euro since last year's vote by Britain to leave the European Union, encouraging German and Swiss bank speculation that the currency will be allowed to rise further. As this chart shows, another half cent jump on Monday in the exchange rate took the franc out of the ranges it has held - with the exception of a two-day blip around the Brexit vote - since the start of August 2015.
Commerzbank analyst Esther Reichelt said in a note to clients that the moves were a clear sign the Swiss National Bank is ready to accept a stronger franc, two years after the dramatic removal of a cap on its value.
"By doing that, it is playing a dangerous game," she said. "The lower the SNB now allows the euro to fall, the more likely it is that market participants will speculate on it, allowing further franc gains, and the more rapidly the euro rate threatens to fall ..., sooner or later the SNB will have to react with increasing interventions again," she added.The Swiss government last month defended the SNB's ultra-loose monetary policy - aimed at quelling currency strength - from criticism that negative interest rates hurt banks and pension funds and makes life hard for savers.