The Swiss franc hovered around 0.77 per USD, close to record highs, supported by expectations that the Swiss National Bank (SNB) will maintain an accommodative policy stance in the near term. Safe-haven demand continued to underpin the currency, albeit less strongly than before.
Inflation in Switzerland remained slightly positive at 0.1% in January, at the lower bound of the SNB’s 0–2% target range and consistent with its first-quarter projections. This reinforced expectations that interest rates will be left unchanged at the SNB’s March meeting and are likely to remain steady through 2026.
SNB President Martin Schlegel recently indicated that the central bank is prepared to tolerate brief periods of negative inflation while prioritizing its medium-term objectives, stressing that the bar for reintroducing negative interest rates remains high.
On the growth front, preliminary data showed that GDP expanded by 0.2% in the fourth quarter, following a 0.5% contraction in the third quarter. The figures underscore the economy’s resilience in the wake of Trump’s 39% tariff and lessen the urgency for immediate policy easing.
