Swiss Franc Weakens to One-Year Low

The Swiss franc traded near $0.81, its weakest level since a year earlier, as traders remain cautious over escalating geopolitical tensions. Oil prices extended their rally after the US-Iran conflict intensified, raising the risk of disruptions at another key maritime chokepoint and fueling concerns over tighter energy supplies, inflation, and economic growth. Meanwhile, the Trump administration imposed new tariffs on Swiss imports, although still adhering to past commitments on tariff ceilings of up to 12.5%. The Swiss National Bank left its policy rate unchanged at 0% in June, while reiterating its willingness to intervene in the foreign exchange market to curb excessive franc appreciation. Meeting minutes showed that policy makers acknowledged increasing near-terms inflation risks, although the medium-term inflation outlook had changed little. The franc has weakened nearly 1% since the latest escalation in Middle East tensions.

The Swiss Franc touched 0.82 against the USD, the lowest since June 2025. Over the past 4 weeks, US Dollar Swiss Franc gained 0.59%, and in the last 12 months, it increased 2.8%.

The Swiss franc has been trading around the $0.80 level since mid-June as investors continue to assess the impact of escalating hostilities in the Middle East. Renewed tensions have pushed oil prices higher, prompting markets to reassess the outlook for global growth, inflation, and monetary policy. The Swiss National Bank left its policy rate unchanged at 0% in June, stating that the medium-term inflation outlook had changed little. However, the meeting minutes revealed that policymakers acknowledged geopolitical tensions had increased near-term inflation risks. The SNB also reiterated its willingness to intervene in the foreign exchange market to counter excessive franc appreciation and preserve price stability. Meanwhile, the IMF urged the central bank to remain prepared to adjust interest rates should a stagflation scenario emerge. The Swiss franc has fallen more than 4% against the US dollar since the outbreak of the conflict with Iran and is down 1.6% so far this year.