FX.co ★ Swiss Franc Remains Firm

The Swiss franc hovered around 0.81 against the USD, maintaining its position near 2011 highs. This strength is bolstered by its appeal as a safe-haven currency and the anticipation that the Swiss National Bank (SNB) will not introduce any immediate rate cuts. Investors are currently navigating a landscape marked by global uncertainties, including the prolonged US government shutdown, divided opinions within the Federal Reserve, ongoing geopolitical tensions, and concerns regarding elevated stock valuations. Concurrently, recent Swiss inflation figures fell short of expectations, rekindling discussions about the possibility of another rate reduction that might see policy rates dip below zero. Nonetheless, SNB officials are exercising caution, remaining vigilant about potential financial stability risks. Tschudin from the SNB recently stated that current policy rates are appropriately set, while Schlegel reiterated projections for a modest increase in inflation in the coming quarters.