UBS Sees Dollar-Franc Support from Yield Gap After SNB Meeting

UBS strategists believe that the Swiss National Bank's (SNB) decision to keep its policy rate unchanged at its latest meeting supports the US dollar against the franc through wide interest rate differentials.

The SNB did not adopt an overly hawkish tone, according to UBS strategists Constantin Bolz and Clémence Dumoncel. Swiss inflation rose from 0.4% to 0.8% year over year in August, but domestic inflationary pressures remain limited.

UBS economists now expect two SNB rate hikes in March and June 2027, bringing forward the first increase from a previous expectation of mid-2027.