Swiss Franc Weakens as SNB Holds Policy Rate at 0% Despite Inflation Upgrades

USD/CHF climbed to its highest level since May 2025, trading near 0.8275, after the Swiss National Bank held its benchmark rate at 0% and softened intervention language. While the SNB raised inflation projections to 0.7% for 2026 and 0.8% for 2027 and 2028, it pushed back against aggressive tightening expectations, noting price pressures remain contained within its target band. Switzerland's 2026 GDP growth outlook was upgraded to 1.5%–2.0%. UBS and market pricing anticipate policy divergence will support the dollar, forecasting the SNB could implement rate hikes by early 2027.