Key Takeaways
- EUR/CHF is trading higher, near a two-week peak, influenced by diminishing safe-haven demand for the Swiss Franc.
- Eurozone inflation data shows core HICP accelerating slightly, moving closer to the European Central Bank’s 2% target.
- The European Central Bank (ECB) has maintained its on-hold stance on interest rates, aligning with current inflation trends.
- Switzerland’s retail sales saw positive growth in September, rebounding from the previous month’s decline.
- The Swiss National Bank (SNB) continues its accommodative monetary policy and has indicated readiness to intervene if necessary.
EUR/CHF Gains Amid Fading Safe-Haven Demand
The Euro (EUR) is performing positively against the Swiss Franc (CHF) today, as reduced demand for safe-haven assets is placing pressure on the CHF. Currently, the EUR/CHF exchange rate is hovering around 0.9287, holding near a two-week high. Investors are evaluating the latest inflation figures from the Eurozone.
Preliminary data from Eurostat reveals that the Harmonized Index of Consumer Prices (HICP), excluding volatile items like energy and food, increased by 0.3% month-over-month in October. This marks an acceleration from the 0.1% rise observed in September. On an annual basis, core inflation was recorded at 2.4% year-over-year, slightly exceeding the consensus forecast of 2.3% and remaining unchanged from the previous month.
Meanwhile, the headline HICP inflation saw a 0.2% increase month-over-month in October, compared to a 0.1% rise in September. Year-over-year, headline inflation eased to 2.1%, aligning with market expectations and down from 2.2% in the prior month.
💡 These preliminary figures indicate that price growth is continuing its trajectory towards the European Central Bank’s (ECB) medium-term target of 2%. This trend supports the central bank’s current policy of maintaining interest rates steady.
ECB Maintains Interest Rates Amid Stable Inflation Outlook
On Thursday, the ECB announced its decision to keep all three key policy rates unchanged. The Deposit Facility, Main Refinancing Operations, and Marginal Lending Facility rates remain at 2.00%, 2.15%, and 2.40%, respectively. The Governing Council acknowledged that inflation is approaching its medium-term objective, and its overall assessment of the inflation outlook has seen no significant changes.
Meanwhile, economic data from Switzerland paints a mixed picture. The latest figures indicate that Real Retail Sales in Switzerland increased by 1.5% year-over-year in September. This performance surpassed the forecast of 0.3% and represents a significant rebound from a 0.4% decline recorded in August.
📌 Addressing the economic landscape on Thursday, Swiss National Bank (SNB) Governing Board Member Petra Tschudin reaffirmed that the SNB’s monetary policy continues to be expansive. She anticipates that inflation will likely remain within the range considered to be price stability.
Tschudin highlighted that the nominal level of the Swiss Franc is not a primary concern in itself; instead, its impact on inflation is the key factor. She emphasized the central bank’s readiness to intervene in the foreign exchange market if deemed necessary. Furthermore, she noted that the SNB would consider reintroducing negative interest rates if market conditions warranted, stating that we know they work.
Market Performance Snapshot
Swiss Franc Performance Today
The table below displays the percentage change of the Swiss Franc (CHF) against major currencies today. The Swiss Franc showed the strongest performance against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | 0.37% | 0.03% | 0.31% | 0.28% | 0.47% | 0.26% | |
| EUR | -0.13% | 0.23% | -0.07% | 0.19% | 0.16% | 0.35% | 0.14% | |
| GBP | -0.37% | -0.23% | -0.32% | -0.03% | -0.07% | 0.12% | -0.11% | |
| JPY | -0.03% | 0.07% | 0.32% | 0.27% | 0.24% | 0.42% | 0.21% | |
| CAD | -0.31% | -0.19% | 0.03% | -0.27% | -0.05% | 0.15% | -0.06% | |
| AUD | -0.28% | -0.16% | 0.07% | -0.24% | 0.05% | 0.19% | -0.02% | |
| NZD | -0.47% | -0.35% | -0.12% | -0.42% | -0.15% | -0.19% | -0.23% | |
| CHF | -0.26% | -0.14% | 0.11% | -0.21% | 0.06% | 0.02% | 0.23% |
The heatmap illustrates the percentage changes between major currencies. The currency in the left column serves as the base, while the currency in the top row is the quote. For instance, the box showing CHF against USD represents the percentage change of CHF relative to USD.
Final Thoughts
The EUR/CHF pair is experiencing upward momentum, driven by a decrease in safe-haven appeal for the Swiss Franc. Eurozone inflation continues to trend closer to the ECB’s target, supporting the central bank’s current monetary policy. While Swiss retail sales have shown resilience, the SNB remains watchful of inflation and currency market dynamics.