Why is Python's round so strange?

Take a look at the documentation:

Note The behavior of round() for floats can be surprising: for example, round(2.675, 2) gives 2.67 instead of the expected 2.68. This is not a bug: it’s a result of the fact that most decimal fractions can’t be represented exactly as a float. See Floating Point Arithmetic: Issues and Limitations for more information.

If you keep digging (i.e. click that link), you'll find an example similar to yours:

The documentation for the built-in round() function says that it rounds to the nearest value, rounding ties away from zero. Since the decimal fraction 2.675 is exactly halfway between 2.67 and 2.68, you might expect the result here to be (a binary approximation to) 2.68. It’s not, because when the decimal string 2.675 is converted to a binary floating-point number, it’s again replaced with a binary approximation, whose exact value is

2.67499999999999982236431605997495353221893310546875

String formatting won't fix your problem either. The floating point number just isn't stored the way you'd expect it to be:

>>> '{:0.2f}'.format(1.555)
'1.55'

This isn't really a "fix", but Python does have a decimal module, which is designed for floating point arithmetic:

>>> from decimal import Decimal
>>> n = Decimal('1.555')
>>> round(n, 2)
Decimal('1.56')

Straight from the documentation:

The behavior of round() for floats can be surprising: for example, round(2.675, 2) gives 2.67 instead of the expected 2.68. This is not a bug: it’s a result of the fact that most decimal fractions can’t be represented exactly as a float. See Floating Point Arithmetic: Issues and Limitations for more information.