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(Bloomberg) -- Thomas Jordan might have had the quietest August since he became Swiss National Bank president five years ago.

Considered the haven of all havens by foreign exchange traders, the franc typically shoots up against other currencies whenever investors get anxious. This year, with no Greek debt crisis and the prospect that euro-area bond purchases might soon be wound down, Switzerland’s currency has been depreciating. It has fallen nearly 6 percent against the euro since the start of 2017 and touched the lowest in 2 1/2 years earlier this month.

“I think Jordan’s holidays this year were very much more relaxed than in years past -- if you look at the data, they seem not to have been intervening much,” said Nadia Gharbi, an economist at Banque Pictet & Cie. in Geneva. “The economy should continue to improve, the depreciation of the Swiss franc is welcome for the exporters.”

While that’s welcome news for the SNB, which has used negative rates and interventions to keep the currency in check since early 2015, the franc’s recent fall isn’t enough for officials to consider any changes to monetary policy. For that to happen, the European Central Bank will have to first raise rates.

To see a seasonality chart of the franc, click here

In past years, June, July and August were months of particular activity for Swiss policy makers. In the summer of 2011, when Jordan was SNB vice president, the franc nearly touched parity with the euro on investor concerns about Greece’s debts, prompting several rounds of easing measures that finally culminated in the central bank setting a cap on the franc in early September. Summer anxiety about peripheral European nations’ sovereign debt continued in 2015, while in 2016 it was Britain’s referendum to leave the European Union that upended financial markets.

Now, with the euro-area economy appearing increasingly resilient and ECB policy makers potentially preparing to scale back stimulus, markets have returned to relative calm, albeit with a bouts of risk-aversion caused by North Korea tensions. The SNB’s inflation-adjusted exchange-rate index shows the franc at its weakest against the euro since December 2014 and sight deposits, closely watched by economists for clues to the central bank’s interventions, have slowed their rise.

Switzerland is a key beneficiary of the improved momentum in the euro area, its top trading partner. Exports, which suffered in previous years due to the unfavorable exchange rate, hit an all-time high in the first half of this year. A gauge of manufacturing activity in July touched its strongest since 2010 and gross domestic product probably expanded 0.5 percent in the three months through June, exceeding the previous quarter’s rate.

“At the moment things look quite good generally, including for the euro-area economy, and that’s positive for Switzerland,” said David Marmet, and economist at Zuercher Kantonalbank. “But for the euro area there’s too much positive news priced in, and there’s bound to be disappointment. We think the franc will in get stronger again in the next three months or so.”

HSBC sees the franc weakening further to 1.20 per euro by the end of the year. According to data compiled by Bloomberg, the currency is forecast to drop to 1.14 per euro by the end of this year, from its current level of 1.13721, and touch 1.17 per euro in 2019.

The SNB’s negative deposit rate -- at minus 0.75 percent the lowest of any major central bank -- is designed to maintain the interest-rate differential with the euro area, thereby lessening pressure on the franc. Jordan said in June that it made no sense to allow the rate-differential between the two institutions to narrow, implying the SNB won’t raise rates before the ECB.

For a timeline on the ECB’s possible exit for QE, click here

The Swiss central bank’s next rate decision is scheduled for Sept. 14, a week after its Frankfurt-based counterpart. While the ECB is set to discuss when it might start winding down its bond purchases, that process will be slow and the central bank has implied that interest rates could be kept low for years.

The long-awaited fall in the franc “is certainly to Swiss policy makers’ liking -- but it remains to be seen if it’s sustainable,” said Alexander Koch, an economist at Raiffeisen Schweiz in Zurich. “It’s a step in the right direction, but not a signal that the SNB will start changing its monetary policy.”

To contact the reporter on this story: Catherine Bosley in Zurich at cbosley1@bloomberg.net.

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Zoe Schneeweiss

©2017 Bloomberg L.P.

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