FX.co ★ Swiss Franc Holds Ground

The Swiss franc remained close to 0.79 against the US dollar, nearing its strongest level since 2011, buoyed by consistent yet moderated safe-haven demand. Although recent easing of geopolitical tensions between the US and Europe has been observed, the potential for risk persists. After discussions with NATO Secretary General Mark Rutte, former President Trump retracted previously threatened tariffs on European nations, agreeing on a framework for a prospective deal concerning Greenland. This move concluded a period of intense rhetoric that had unsettled European markets and stoked fears of a rekindled global trade war. Nonetheless, the specifics of this framework remain ambiguous, particularly as Denmark has unequivocally refused any negotiations related to ceding territory, while Trump's stance on potential military actions in Iran remains uncertain. In parallel developments, Swiss National Bank (SNB) President Martin Schlegel mentioned the possibility of experiencing negative inflation rates this year; however, he emphasized that this is not a cause for concern, as the central bank continues to focus on medium-term inflation targets. With interest rates maintained at 0% for the past two meetings, officials have indicated that further rate reductions could pose significant risks. Consequently, neither rate cuts nor hikes are anticipated in the near future.