The Swiss National Bank (SNB) has signalled a readiness to remain active in the foreign exchange market as necessary. Their latest inflation forecasts see consumer price increases at 0.2% in 2025 (unchanged), 0.3% in 2026 (down from 0.5%), and 0.6% in 2027 (down from 0.7%). Meanwhile, GDP growth projections are slightly revised upwards, with 2025 expected to see around 1.5% growth (previously 1.0-1.5%) and 2026 forecast at 1.0% (unchanged).

According to the SNB, inflationary pressures remain virtually unchanged compared to their last monetary policy review. The main risk to Switzerland’s economic outlook continues to be the trajectory of the global economy, although the outlook has improved modestly due to lower US tariffs and somewhat better global developments.

Despite uncertainties stemming from US tariffs and trade policies, many countries’ economies have demonstrated greater resilience than initially anticipated. The SNB’s baseline scenario projects moderate global economic growth over coming quarters, though risks remain that US tariffs and trade policy uncertainties could, in future, weigh more heavily on global momentum. Conversely, there is also the possibility that the global economy could outperform current expectations.

Following the announcement, the Swiss franc (CHF) strengthened slightly, reflecting the SNB’s more optimistic tone regarding the economy amid positive tariff developments. Since no surprises on interest rates were expected and markets have fully priced in a zero percent chance of further rate cuts by the SNB, the franc’s movements are likely to remain influenced more by shifts in risk sentiment than by direct monetary policy actions.

In the currency markets, USD/CHF extended its decline towards a key support zone around 0.7980 following the SNB decision. This move follows the US Federal Reserve’s recent 25 basis points rate cut, which was widely anticipated. Fed Chair Jerome Powell adopted a somewhat dovish stance, downplaying inflation risks in favour of concerns over labour market weakness, which added pressure to the US dollar.

Traders should watch the 0.7980 level closely on the 4-hour chart as a critical support zone. Buyers might be expected to enter near this area, with a clear stop-loss placed just below, aiming for a rally back toward recent highs near 0.81. Conversely, a break below 0.7980 could encourage sellers to increase bearish bets targeting the next support at 0.7872.

Original Source: Giuseppe Dellamotta of investinglive.com