The CHF/SEK currency pair scaled a fresh 9 1/2-week high of 11.9103 on Monday, as the escalating conflict in the Middle East in the wake of the US strike on crucial Iranian nuclear facilities over the weekend spurred demand for safe-haven currencies such as the Swiss Franc.

Investors were also on watch for what the Islamic state’s response could be.

US President Trump on Sunday raised the question of a regime change in Iran, while senior US officials warned Tehran against retaliation.

On the cenbank policy front, Sweden’s Riksbank lowered its key policy rate by 25 basis points to 2% at its June meeting, in line with market consensus.

The central bank highlighted slowing economic recovery and easing inflation pressures as a basis for its decision. The rate cut aims to stabilize inflation at Riksbank’s target and stimulate the economy.

Riksbank noted that global uncertainty, stemming from global trade tensions and the escalating Middle East conflict, continued to weigh on the outlook.

The Swedish central bank also flagged another possible rate cut later in 2025.

In the meantime, the Swiss National Bank lowered its policy rate by 25 basis points to 0% at its June meeting, in line with market consensus.

The decision, which came amid easing inflationary pressures and a weakening global economic outlook, brought borrowing costs to their lowest level since August 2022.

Swiss consumer prices dropped 0.1% in May – the first decline in four years, mostly contributed to by lower prices in tourism and oil products.

The central bank now forecasts average inflation at 0.2% for 2025, at 0.5% for 2026 and at 0.7% for 2027.

The CHF/SEK currency pair was last up 0.73% on the day to trade at 11.9091.