Switzerland: Franc Holds Firm.

The Swiss franc traded around 0.78 per USD, remaining close to record highs, supported by continued safe-haven demand amid persistent geopolitical risks. The continued escalation of the Middle East conflict poses a major threat to the global economy, as it intensifies inflationary pressures and raises the prospect of higher interest rates. The franc has remained strong even after the Swiss National Bank signaled it is increasingly ready to intervene in FX markets. A key concern for the central bank is the sustained appreciation of the currency amid the current risk environment, which could generate deflationary pressures. Swiss inflation remains extremely low, at 0.1%, staying at the lower bound of the SNB’s 0–2% target range.