Switzerland’s economy may experience modest growth this year.

The Swiss franc has continued to strengthen, approaching its highest level since 2011. This appreciation is supported by rising demand amid a weakening U.S. dollar, as investors move funds out of the U.S. market due to growing uncertainty stemming from unpredictable tax policy changes under President Trump. On Monday, Trump proposed a temporary exemption from tariffs for the automotive industry—previously imposed—to give automakers more time to adjust their supply chains. He also announced temporary tax exemptions for key technology products such as semiconductors and smartphones.

The continued appreciation of the Swiss franc has raised hopes among investors that the Swiss National Bank (SNB) may cut interest rates further to mitigate deflation risks. This is reflected in the persistently low inflation rate, with the latest data nearing 0%. The stronger franc also reduces import costs, leading some sellers to delay sales in anticipation of even lower import prices.

Switzerland’s year-on-year inflation rate stood at 0.3% in March, below the market expectation of 0.5% and under the central bank’s target. Housing and energy prices increased only slightly, while transportation costs continued to decline, contributing to lower inflation across several sectors. Core inflation—which excludes volatile food and energy prices—remained stable at 0.9% for the third consecutive month.

The SNB cut its interest rate by 25 basis points to 0.25% in its March meeting, citing low inflation and ongoing economic uncertainty. This was the central bank’s fifth rate cut. The SNB forecasts inflation to be around 0.4% in 2025 and 0.8% in 2026. Despite a slight rise in unemployment, the SNB expects GDP growth of 1% to 1.5% in 2025, supported by higher real wages and a more accommodative monetary policy, although weak global demand could weigh on trade.

Switzerland’s economic index rose to 103.9 in March, up from 102.6 in February, marking a stronger-than-average gain since the beginning of the year. All key indicators reflected positive developments, with improved outlooks in manufacturing, other services, and the construction industry. These improvements were driven by increased personal consumption, even as foreign demand remained steady.

The yield on 10-year Swiss government bonds fell to about 0.42%, the lowest level since mid-February, as investors remained concerned about the prolonged impact of global trade tensions on economic growth. This is evident in the escalating U.S.-China trade war, despite President Trump’s announcement of a 90-day suspension of import tariffs for some countries. Meanwhile, Swiss economic institutes have warned that Switzerland may face significant economic losses due to U.S. import tariffs.

Techical analysis data (5H)

Resistance: 0.8812, 0.8829, 0.8839

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 0.8775 - 0.8785 but cannot break the support at 0.8785, you may set a TP at approximately 0.8829 and SL at around 0.8758 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 0.8812 - 0.8829, you may set a TP at approximately 0.8839 and SL at around 0.8775 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 0.8812 - 0.8829 but cannot break the resistance at 0.8812, you may set a TP at approximately 0.8775 and SL at around 0.8839 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 0.8775 - 0.8785, you may set a TP at approximately 0.8758 and SL at around 0.8829 or according to your acceptable risk.

Pivot point March 16, 2025 09:50 PM. GMT+7