Swiss CPI declines, will SNB revert to negative rates?

[Ben Graham]

The Swiss franc has edged lower on Thursday. In the North American session, USD/CHF is trading at 0.8052, down 0.13% on the day.

Swiss CPI declines in August

Swiss inflation declined in August for the first time since January. CPI slipped 0.1%, following the July reading of zero and the market estimate of zero. Yearly, CPI rose 0.2%, unchanged from July and in line with the market estimate.

The soft inflation report could support the case for the Swiss National Bank to return to negative interest rates. The SNB had a negative rate policy in effect for eight consecutive years until 2022, when high inflation forced the bank to sharply tighten policy. The markets widely expect the SNB to hold rates at this month's meeting, but if inflation continues to sag, there will be pressure on the central bank to lower rates.

SNB President Martin Schlegel has stressed in the past that the central bank could revert back to negative rates if necessary but would try to avoid doing so since it causes difficulties for businesses and consumers.

The SNB is also keeping a close eye on the value of the Swiss franc. The Swiss currency has soared against the US dollar, gaining 11.3% since the start of the year. In June, USD/CHF fell below the psychologically significant 0.80 level for the first time 2011. The central bank does not want the franc to continue appreciating, since it means that Swiss exports are more expensive and thus less competitive.

US tariffs have dealt a blow to the export-reliant Swiss economy. Switzerland has had to absorb US tariffs of 39% on most goods, which has put the country at a serious disadvantage against the neighboring European Union, which faces tariffs of only 15% on most goods.

USD/CHF Technical

• USD/CHF is testing resistance at 0.8045. Next, there is resistance at 0.8054 and 0.8064
• 0.8035 and 0.8026 are providing support

USDCHF 4-Hour Chart, September 4, 2025

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