Inflation rise won’t stop SNB fighting strong franc

The Swiss National Bank will reiterate after its meeting on 16th March that it remains fully prepared to act to prevent any significant appreciation of the Swiss franc in the coming months. Although inflation has picked up since the start of the year, the Bank is unlikely to breathe easy, particularly given the potential upward pressure on the franc from heightened worries about euro-zone political developments. But we think that its ammunition will ultimately prove to be limited and continue to see the franc hitting parity with the euro later this year.