... segments (Figure 2). The CHF appreciated from 0.67 to 0.85. Internal factors of GDP growth, SNB's monetary policy, inflation rate, etc. and external factors of the U.S. economic climate and the Iraq war all contribute to increasing the demand for the Swiss Franc. October 2002 through May 2003: the CHF appreciated from 0.68 to 0.77 due to: (1) Better than expected GDP growth rate in Switzerland for the 4th quarter (+1.4%2) of 2002. (2) A stable consumption, boosted exports of higher trade surplus (+4.8% of exports vs. -1.6% of imports in 4th quarter3), and a large current account surplus. (3) More expansive monetary policy (e.g., the three-month Libor rate falling from 0.59% in February to 0.29% in May4) to support economic recovery. (4) Low yearly inflation rate of 1.0% for both 4th and 1st quarters5. (5) External factors including: a widened budget and trade deficit, the outbreak of the Iraq conflict, ...

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