The Swiss franc traded around 0.79 per USD, hovering near its weakest level since early April, after softer-than-expected inflation data dampened expectations of a Swiss National Bank rate hike this month. Annual inflation in May held at 0.6%, its highest level since December 2024 but still below the 0.8% consensus forecast. Inflation had been close to flat at the start of the year, then edged higher following late-February strikes on Iran.
Switzerland’s relatively low dependence on oil and gas—supported by its Alpine hydropower and nuclear energy—continues to insulate it more than the eurozone from energy-price shocks. SNB Chairman Martin Schlegel said on Wednesday that, despite recent increases, medium-term inflation pressures remain broadly unchanged. Markets now expect the central bank to keep its key policy rate at 0% through the end of the year.
At the same time, investors closely followed developments in the Middle East. Iran claimed it had targeted a US command ship in the Gulf of Oman, the Republican-controlled House of Representatives voted to block US military action against Iran, and Israel and Lebanon reached a conditional ceasefire agreement.
