The Swiss Franc Holds Steady Following Comments from Thomas Jordan, President of the Swiss National Bank

The Swiss franc has experienced significant fluctuations, reaching eight-year highs against the US dollar in the last week of 2023. However, 2024 brought a considerable turnaround, with the US dollar appreciating by 8.2% against the Swiss currency. This sharp depreciation of the franc was not an unwelcome event for the Swiss National Bank (SNB), as it helped make Swiss exports more competitive in global markets. The late stabilization of the franc's value last year was aimed at controlling inflation, which threatened to exceed the central bank’s target range of 0% to 2%.

The Swiss National Bank was the first major central bank to lower interest rates in March. Further rate cuts are expected in June and September, although SNB President Thomas Jordan expressed caution in his recent speech. Jordan highlighted the uncertainty in the global environment and suggested that the SNB might adjust its monetary policy again "if necessary."

Inflation stability in Switzerland and a sound economic condition enabled the SNB to cut rates in March. The Credit Suisse Economic Expectations index rose to 17.6 in April, marking its third consecutive increase after more than two years in negative territory (the zero level separates optimism from pessimism). All eyes are now on the US Core PCE Price Index, the Federal Reserve's preferred inflation gauge. It is expected to ease to 2.6% year-on-year in April, down from 2.8% in May. On a monthly basis, the index is expected to remain unchanged at 0.3%.

Faced with global challenges and changes in monetary policy, the Swiss franc remains one of the most stable currencies in the world. The SNB’s past and planned actions aim not only to control inflation but also to support the national economy by strengthening Switzerland’s export position. Continuing to monitor global economic indicators and the monetary policies of other central banks will be crucial for the future value of the Swiss franc.