The EUR/CHF currency pair hovered just above a 7-week low of 0.9266 on Monday ahead of French and German preliminary CPI inflation data for December, which will provide further clues over price pressure within the Euro Area’s largest economies.
At the same time, the Swiss Franc drew certain support from heightened demand for safe-haven assets following the United States’ weekend military operation in Venezuela and the capture of President Nicolas Maduro.
Annual headline inflation in France probably remained stable at 0.9%, while inflation in Germany probably eased to 2%, according to market consensus.
Both reports are due tomorrow.
The ECB kept interest rates unchanged in December and signaled that they would likely remain steady for some time.
ECB President Christine Lagarde emphasized that forward guidance was limited due to uncertainty and the central bank would follow a data-driven, meeting-by-meeting approach.
Money markets are currently pricing a 25 bps ECB rate cut in February, with chances being below 10%. This suggests the ECB policy easing cycle may be nearing its end.
Meanwhile, in Switzerland, factory activity shrank more than expected in December. The procure.ch and UBS Manufacturing PMI came in at a reading of 45.8 in December, down from 49.7 in November.
The latest reading was well below market consensus of 49.9 and has also been the lowest since May 2025. It indicated renewed pressure on the Swiss manufacturing sector, despite some easing in protectionism-related headwinds.
The EUR/CHF currency pair was last up 0.08% on the day to trade at 0.9290.
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