Since the year began, the Swiss franc has stayed near 0.85 per USD. This level is close to its 12-year peak of 0.83 on December 29th. The stability comes from the Swiss National Bank’s (SNB) actions and the belief it might stay strict with its policy for a while. Recently, Switzerland’s inflation rose unexpectedly to 1.7% in December.
It’s still within the SNB’s expected range but higher than most predicted. This increase is similar to what’s happening in neighboring Eurozone countries, suggesting the SNB might raise rates to keep the franc strong and control import inflation. This contrasts with the growing expectation of quicker rate cuts by the US Federal Reserve. The SNB also influences the franc by frequently selling foreign exchange. The latest figures show their reserves are at their lowest in over seven years.