Key Moments
- EUR/CHF trades near 0.9265, close to its weakest level since Dec. 26 as demand for the Swiss franc rises.
- US-EU tariff threats support safe-haven flows into CHF, while upbeat ZEW data cushions the euro.
- Investors await comments from SNB Chair Schlegel and senior ECB officials later on Tuesday.
Risk-Off Flows Push CHF Higher
The Swiss franc is gaining ground against the euro on Tuesday. EUR/CHF has slipped toward 0.9265, near its weakest level since Dec. 26. Investors are moving into safe-haven assets as US-EU trade tensions escalate.
President Trump renewed tariff threats against several European nations over the Greenland dispute. In response, European leaders signaled they could retaliate. As a result, risk sentiment worsened and traders sought defensive currencies.
However, the euro has not fallen sharply. That’s because stronger Eurozone sentiment data helped cushion the downside. Still, the overall tone remains tilted toward risk-off.
ZEW Surveys Provide Euro Support
Fresh ZEW survey results helped offset the risk-off mood. The Eurozone Economic Sentiment index rose to 40.8 in January, above expectations of 35.2 and up from 33.7 in December. This suggests investor confidence is improving.
German sentiment also strengthened. The German Economic Sentiment index jumped to 59.6, beating the 50 forecast and up from 45.8. Meanwhile, the Current Situation index improved to -72.7 from -81, signaling slightly less contraction.
| Indicator | Region | Latest | Previous | Consensus |
|---|---|---|---|---|
| ZEW Economic Sentiment | Eurozone | 40.8 | 33.7 | 35.2 |
| ZEW Economic Sentiment | Germany | 59.6 | 45.8 | 50 |
| ZEW Current Situation | Germany | -72.7 | -81 | -75.5 |
Swiss Price Data Shows Disinflation
Swiss producer and import prices fell 0.2% in December, missing forecasts for a 0.2% rise. This follows a 0.5% drop in November. The data shows continued disinflation pressures.
On a yearly basis, prices fell 1.8% in December, compared with a 1.6% drop in November. Overall, the trend points to ongoing price weakness.
| Indicator | Period | Monthly | Yearly | Prev. Monthly | Prev. Yearly | Consensus |
|---|---|---|---|---|---|---|
| Producer & Import Prices | Dec | -0.2% | -1.8% | -0.5% | -1.6% | 0.2% |
Markets Await SNB and ECB Comments
Traders now await remarks from SNB Chair Martin Schlegel at the World Economic Forum in Davos. After that, attention will shift to the ECB, with comments expected from Governing Council member Joachim Nagel and ECB President Christine Lagarde.
These speeches could influence expectations for future monetary policy. In turn, that may drive EUR/CHF direction in the near term.
Why CHF Moves Matter
The Swiss franc is a major global currency and often acts as a safe haven. It tends to strengthen when markets turn cautious. This is driven by Switzerland’s reputation for stability, strong reserves, and political neutrality.
Additionally, CHF remains closely tied to the euro because Switzerland depends heavily on trade with the Eurozone. Thus, EUR/CHF often mirrors broader Eurozone risk sentiment.
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