The Swiss franc firmed to about $0.807 against a softer US dollar, rebounding from a one-year low of $0.81227 reached on June 24, as falling oil prices tempered expectations of further Federal Reserve rate hikes. Despite the recent recovery, the franc remains 4.8% weaker than it was before the outbreak of conflict in the Middle East, and any potential peace agreement could further diminish its appeal as a safe-haven asset.
The Swiss National Bank left its policy rate unchanged at 0% for the fourth consecutive meeting, stating that the current stance is still compatible with price stability and sustained economic growth. At the same time, the SNB raised its inflation forecast and reiterated that it stands ready to intervene in the foreign exchange market if necessary.
On the growth front, the International Monetary Fund projected that Switzerland’s economic expansion will slow to 1.1% in 2026, reflecting subdued external demand and uncertainty over tariffs. The Swiss government similarly downgraded its 2026 domestic growth forecast to 0.9%, pointing to the dampening impact of recent surges in energy prices.
