Switzerland's central bank has been making drastic changes to its reserves that should logically suppress EUR/USD movement.
These flows are large enough to anchor the pair.

The reduction of reserves which reached their peak in January 2022 has led to a sharp drop in Swiss sight deposits which have plunged by 260 billion francs since September 2022.

While deposits have slumped, EUR/USD initially based and then surged but has mainly been penned between 1.05 and 1.10 this year.
Only a handful of days have been spent outside of that range in the past 10 months.

With 75% of Swiss FX reserves held in either dollars or euros and 75% of all reserves held in bonds, the reason for the rapid reduction and their big influence upon EUR/USD is clear.

Should current risk aversion, which has boosted the franc toward multi-year highs, spur the SNB to support EUR/CHF, a rise in reserves that may ultimately be reduced could see EUR/USD contained for longer.

It's also worth note that intervention to support EUR/CHF often underpins EUR/USD, while the rebalancing of any intervention means SNB sells EUR/USD - 37% of reserves are dollars.

Both the reduction of reserves and intervention suppress EUR/USD volatility, which peaked when sight deposits began to fall and remains suppressed.

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