FX.co ★ Swiss Franc Hovers Around 2011-Highs

The Swiss franc remained largely stable around 0.792 per USD, maintaining proximity to its 2011 peaks. This steadiness is supported by the franc's appeal as a safe haven amid rising tensions, following U.S. President Donald Trump's tariff threats targeting several European countries concerning the Greenland controversy. European leaders' willingness to retaliate has rekindled concerns about a broader trade conflict. Simultaneously, market participants are continuously evaluating the interest rate outlook. Swiss National Bank President Martin Schlegel, speaking at the World Economic Forum in Davos, suggested that instances of negative inflation could occur this year. However, he stressed that such instances are not worrisome, as the central bank is concentrating on medium-term inflation objectives. The central bank has maintained its interest rate at zero for the past two meetings, suggesting that there are significant risks associated with reducing the rate below this threshold. As of now, investors are not anticipating either a rate reduction or an increase for the rest of the year.