The Swiss franc weakened past 0.88 per USD after reaching a four-month high of 0.876 on March 18th, following the Swiss National Bank’s decision to lower its key policy rate to 0.25%, its lowest level since September 2022.
Swiss franc pulls back from four-month high
Although the move was largely anticipated, the central bank refrained from providing specific guidance on future policy actions. Instead, policymakers emphasized that the rate cut was appropriate to align monetary conditions with the low inflationary environment. This action also helps prevent the franc from becoming excessively strong, especially as geopolitical risks, stable inflation in Switzerland, and uncertain economic policies in the U.S. could drive investors to seek safety in the currency.
Swiss annual inflation rate falls
The latest data revealed that Switzerland’s annual inflation rate fell to 0.3%, its lowest in nearly four years. Meanwhile, Saron futures indicate that the market does not expect further rate cuts in the near future.
