Swiss Franc Hovers at 10-Year High

The Swiss Franc touched 0.78 against the USD, the highest since January 2015.

Over the past 4 weeks, US Dollar Swiss Franc lost 0.78%, and in the last 12 months, it decreased 13.71%.

The Swiss franc hovered near 0.79 per USD, approaching its strongest level since 2011, as persistent but subdued safe-haven flows lifted the currency.

Despite easing US–Europe geopolitical tensions, risks remain.

Trump withdrew threatened tariffs on European countries after meeting NATO Secretary General Mark Rutte, agreeing on a framework for a future Greenland deal.

This ended weeks of rhetoric that unsettled Europe and raised fears of a renewed global trade war.

However, details of the framework remain unclear, with Denmark ruling out any negotiations over ceding territory, while Trump has not ruled out possible military action in Iran.

Meanwhile, SNB President Martin Schlegel noted that negative inflation readings are possible this year but are not worrisome, as the central bank prioritizes medium-term inflation.

With rates held at 0% for two meetings, officials signal that cuts below this level carry substantial risks.

Neither rate cuts or hikes are expected in the near-term.

The Swiss franc was little changed around 0.792 per USD, holding close to 2011-highs, buoyed by safe-haven flows following tariff threats from US President Donald Trump toward several European nations over the Greenland issue.

European leaders’ readiness to retaliate has revived fears of a wider trade conflict.

Meanwhile, market participants continued to assess the interest rate outlook.

Swiss National Bank President Martin Schlegel, speaking on the sidelines of the World Economic Forum in Davos, said that negative inflation prints are possible this year but stressed that they wouldn't be a problem because the central bank's target is medium-term inflation.

The central bank has held its rate at zero for two meetings, indicating that the risks of cutting below this level remain substantial.

The Swiss franc strengthened 0.5% to just below 0.80 per USD, holding close 2011-highs, as US President Donald Trump's latest tariff threats against Europe over Greenland drove demand for the safe-haven currency.

Over the weekend, Trump announced plans to impose an additional 10% import tariff from February 1 on goods from eight European nations, to remain in place until the US is allowed to purchase Greenland from Denmark.

Major EU states reacted sharply to the threats, with France and others calling them blackmail and considering a range of unprecedented economic countermeasures.

The Swiss franc traded around 0.80 per USD, remaining close to its highest level since 2011, largely supported by safe-haven demand against ongoing geopolitical concerns.

Meanwhile, the latest inflation data alleviated pressure on the Swiss National Bank (SNB) to cut rates below zero.

Swiss consumer inflation held steady in December, defying expectations of a 0.1% decline and following a 0.2% drop in November.

On a year-on-year basis, the CPI rose 0.1%, in line with forecasts, after November’s flat reading.

The Swiss franc eased to around 0.795 per USD but remained close to levels not seen since 2011, as traders reacted to renewed geopolitical tensions following the United States’ capture of Venezuelan President Nicolas Maduro in a weekend raid.

Global economic uncertainty tied to Trump-era trade policies, along with expectations of further rate cuts, also supported safe-haven demand.

Investors are now focused on the domestic January 8’s inflation report for clues on SNB policy, with the CPI expected to decline 0.1% month-on-month and rise just 0.1% year-on-year.

The Swiss National Bank kept rates at 0% in December, as it battles deflationary pressures, and analysts largely anticipate no changes in 2026.

Meanwhile, a fresh PMI survey showed Swiss manufacturing activity contracted more than expected, falling to a seven-month low in December.