The Swiss franc hovered around 0.78 per USD, close to its record highs, supported by sustained safe-haven demand amid ongoing geopolitical tensions. The escalating conflict in the Middle East poses a significant risk to the global economy, intensifying inflationary pressures and increasing the likelihood of higher interest rates worldwide.
Despite the Swiss National Bank signaling a growing readiness to intervene in the foreign exchange market, the franc has remained strong. A key concern for the SNB is the currency’s ongoing appreciation in the current risk environment, which could exert deflationary pressure on the Swiss economy. Inflation in Switzerland remains exceptionally low at 0.1%, sitting at the very bottom of the central bank’s 0–2% target range.
