EBC Markets Briefing | ​Swiss franc up on US shutdown risks

The Swiss franc strengthened on Monday as the growing risk US government shutdown weighed down the dollar. Trump is meeting with congressional leaders at the White House to address the issue before deadline.

The SNB held its benchmark interest rate at zero on Thursday, the lowest among major central banks, as it warned that Trump's tariffs had dimmed the outlook for economy heading into 2026.

Analysts also highlighted the Swiss franc's relative stability versus the euro as a reason to stay on hold. Chairman Martin Schlegel repeated his position that there are high hurdles to reintroducing negative rates.

Headline inflation was unchanged at 0.2% in August, beating economist expectations for another increase of 0.1%. The figure is still likely to remain close to zero over the coming months.

Trump announced last week that brand-name or patented pharmaceutical products will be subject to a 100% tariff starting 1 October – unless the company is building a manufacturing plant in the US.

The moves are not expected to decrease the States' reliance on foreign drug supply and the impact on exporting countries such as Switzerland is likely to be relatively limited too, experts say.

The franc managed to find support at 50 SMA, so it could rise further towards 0.7900 per dollar in the coming sessions. The uptrend that has lasted for months will remain intact until the blue line does not hold.

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