Euro Gains Strength vs Swiss Franc After SNB Holds Rates

The Euro has gained strength against the Swiss Franc as the Swiss National Bank (SNB) held its key interest rate at 0%. The decision was in line with market expectations. SNB Chair Martin Schlegel noted that the recent depreciation of the Swiss Franc partly reflects widening interest rate differentials with other currency areas.

The Euro has been boosted by stronger-than-expected German economic data, particularly from the IFO Business Climate Index. In September, the index rose to 89.9, beating market consensus and rising from 88.8 in August.

The SNB expects inflation to rise further in the fourth quarter before declining over the course of 2027, but it still sees medium-term inflationary pressure as relatively low. The central bank is willing to intervene in the foreign exchange market if necessary, but for now, it's maintaining a cautious stance on the economic outlook.