Swiss Franc Remains Strong

The Swiss franc traded around 0.77 per USD, nearing record levels, buoyed by expectations that the Swiss National Bank (SNB) will keep an accommodative stance in the near term. Safe-haven demand also continued to support the currency, though less strongly. Swiss inflation stayed slightly positive at 0.1% in January, at the lower end of the SNB’s 0–2% target range and in line with the bank’s Q1 outlook. This cemented expectations that interest rates will remain unchanged at the SNB’s March meeting and likely throughout 2026. President Martin Schlegel recently stated that the SNB is willing to tolerate brief periods of negative inflation while focusing on medium-term objectives, as the threshold for negative rates remains high. Meanwhile, preliminary Q4 GDP data showed 0.2% growth, following a 0.5% contraction in Q3, highlighting the economy’s resilience after Trump’s 39% tariff and reducing pressure for immediate policy easing.

The Swiss franc traded around 0.77 per USD, approaching record levels, bolstered by continued safe-haven demand and expectations that the Swiss National Bank will maintain a steady policy stance. Latest data showed Swiss inflation stood at 0.1% in January 2026, unchanged from December and in line with forecasts, consistent with the SNB’s first-quarter outlook. This has kept expectations for unchanged rates intact for the March meeting and possibly the remainder of the year. President Martin Schlegel recently noted that negative inflation readings are possible this year, but stressed that this is not problematic given the central bank’s medium-term focus. Officials have repeatedly insisted that the bar for cutting rates below zero remains high, while acknowledging that excessive franc appreciation from global safe-haven flows could threaten price stability, which could lead the central bank to act.

The Swiss franc traded slightly below 0.770 per USD, approaching record levels, buoyed by safe-haven flows and dollar weakness. Investor caution was influenced by lingering concerns over artificial intelligence and Chinese regulators’ guidance for financial institutions to limit US Treasury exposure amid policy uncertainty, a stance echoed by other major economies. Meanwhile, investors are awaiting January’s domestic inflation data, due February 13, with analysts forecasting annual inflation to remain subdued at 0.1%. SNB Chairman Martin Schlegel has recently acknowledged the difficulties posed by low inflation and current interest rate at 0%, emphasizing the bank’s focus on price stability with a 0–2% inflation target. He said the central will monitor the franc and intervene in FX markets if needed, rather than immediately cutting rates, while reiterating the current policy remains appropriate as inflation is expected to rise in coming months.