Swiss Franc Stagnates as Tariff Concerns Loom

The Swiss franc held steady against the U.S. dollar on Thursday after the Swiss National Bank decided to keep its interest rate at zero, as widely anticipated. Meanwhile, traders remain on edge, awaiting economic data that might highlight the effects of tariffs and provide clarity on future interest rates.

The SNB maintained its key interest rate at the lowest level among major central banks. This decision comes amidst warnings that U.S. tariffs, introduced by President Trump, could impact the Swiss economy adversely by 2026. The dollar slightly gained 0.1% against the Swiss franc to 0.7960, while the euro also rose 0.1% to 0.9345 against the franc.

Economist Maxime Botteron from UBS highlighted that U.S. tariffs are the main short-term challenge for Swiss economic growth. Although a negative interest rate could reduce pressure on the franc, it is unlikely to counteract the tariffs effectively. The dollar index remained stable, with traders focusing on the Fed's upcoming economic assessments and the looming possibility of a government shutdown.