Swiss Franc Holds Firm

The Swiss franc traded around 0.78 per USD, remaining close to record highs, supported by continued safe-haven demand amid persistent geopolitical risks. The continued escalation of the Middle East conflict poses a major threat to the global economy, as it intensifies inflationary pressures and raises the prospect of higher interest rates. The franc has remained strong even after the Swiss National Bank signaled it is increasingly ready to intervene in FX markets. A key concern for the central bank is the sustained appreciation of the currency amid the current risk environment, which could generate deflationary pressures. Swiss inflation remains extremely low, at 0.1%, staying at the lower bound of the SNB’s 0–2% target range.

The Swiss franc traded near 0.78 per USD, remaining close to historic highs as investors balanced rising safe-haven demand amid escalating Middle East tensions against the risk of Swiss National Bank intervention and subdued inflation. The conflict intensified after Beirut was struck by Israel on Friday following an unprecedented evacuation of the Lebanese capital’s southern suburbs, marking a major expansion of its war with Iran, launched a week earlier alongside the US. Meanwhile, Donald Trump said Washington should play a role in selecting Iran’s next supreme leader after the reported death of Ali Khamenei. At the same time, Swiss National Bank Vice-President Antoine Martin reiterated the central bank’s readiness to intervene to curb excessive franc appreciation, citing the complex geopolitical backdrop. Earlier this week, data showed Swiss inflation held at 0.1% in February, slightly above forecasts of a 0.1% decline and still at the lower bound of the SNB’s 0–2% target range.

The Swiss franc traded around 0.78 per USD, close to historic highs, as investors weighed geopolitical tensions against potential SNB intervention and muted inflation data. The New York Times reported that, a day after recent attacks began, operatives from Iran’s Ministry of Intelligence indirectly contacted the CIA, offering to discuss terms for ending the conflict. However, officials familiar with the outreach expressed skepticism that either the Trump administration or Iran is immediately prepared for a diplomatic “offramp.” Meanwhile, Swiss National Bank Vice-President Antoine Martin reaffirmed the central bank’s heightened readiness to intervene to curb excessive franc appreciation, citing the complex geopolitical landscape. Swiss inflation remained at 0.1% in February for the third consecutive month, slightly above forecasts of a 0.1% fall and at the lower bound of the SNB’s 0–2% target, keeping policymakers cautious amid deflation risks.