Swiss Franc Weakens After SNB Decision
The Swiss franc weakened past 0.82 per USD, its lowest level since May of 2025, following the Swiss National Bank’s monetary policy decision. Contrasting with other central bank's, the SNB left its key rate unchanged at 0% at its September meeting, citing elevated uncertainty in the Middle East that keeps global oil prices elevated. Still, Swiss economic growth remained resilient, supported by a weaker Swiss franc, while medium-term inflationary pressures increased only slightly. Policymakers also reiterated their preference for foreign-exchange market interventions to curb excessive appreciation. Elsewhere, a widening interest rate differential with the US, amid growing expectations of further Fed rate hikes, could increase the Swiss franc’s appeal as a carry-trade funding currency. As traders shift toward currencies with exchange-rate stability and low borrowing costs, such as the franc, the selling of franc loans for higher-yielding assets puts downward pressure on the currency.
82 per USD, its lowest level since May of 2025, following the Swiss National Bank’s monetary policy decision. Contrasting with other central bank's, the SNB left its key rate unchanged at 0% at its September meeting, citing elevated uncertainty in the Middle East that keeps global oil prices elevated. Still, Swiss economic growth remained resilient, supported by a weaker Swiss franc, while medium-term inflationary pressures increased only slightly. Policymakers also reiterated their preference for foreign-exchange market interventions to curb excessive appreciation.
Elsewhere, a widening interest rate differential with the US, amid growing expectations of further Fed rate hikes, could increase the Swiss franc’s appeal as a carry-trade funding currency. As traders shift toward currencies with exchange-rate stability and low borrowing costs, such as the franc, the selling of franc loans for higher-yielding assets puts downward pressure on the currency.