SNB will continue to favour a strong Franc to limit the upside risks for inflation – Commerzbank

The publication of the Swiss inflation rate took a bit of a back seat last week. Economists at Commerzbank analyze Franc’s outlook after the the report was not particularly spectacular. 

Inflation development provides little cause for concern for SNB

The most recent inflation data provides little cause for concern. Of course, there are upside risks for inflation and the SNB expects a renewed moderate rise in the annual rate over the coming quarters, but this is unlikely to be sufficient for a further tightening of monetary policy.

Instead, the SNB is likely to maintain its hawkish communication in view of increased uncertainty. Above all, it will continue to favour a strong Franc to limit the upside risks for inflation.

Against the background of the crisis in the Middle East, the Franc is likely to principally remain in demand as a safe haven anyway.