EUR/CHF Steadies as Inflation Shifts ECB Outlook

Key Moments

EUR/CHF Holds Near Flat After Eurozone Data

EUR/CHF was quoted around 0.9230 on Thursday at the time of writing, leaving the cross virtually unchanged on the day. The pair was, however, trading off its session trough of 0.9198 set earlier, following the publication of revised March inflation figures for the Eurozone.

Eurozone Inflation Revision Highlights Energy Impact

Updated numbers showed the Eurozone Harmonized Index of Consumer Prices (HICP) rising 1.3% month-on-month in March, up from a 0.6% increase in February and slightly above the preliminary 1.2% print. On a yearly basis, headline inflation was revised up to 2.6%, compared with 1.9% previously, reaching its highest reading since July 2024.

Core HICP, which strips out energy, food, alcohol and tobacco, was revised to 2.3% year-on-year. This was marginally lower than both the earlier estimate of 2.4% and February’s 2.4% rate.

The combination of stronger headline inflation and a softer core measure points to a growing contribution from energy prices to overall price dynamics in the currency bloc. This development is feeding into market expectations about the European Central Bank’s (ECB) policy stance ahead of its next meeting scheduled for April 29-30. The ECB’s March 19 monetary policy accounts, due later on Thursday, are expected to provide further detail on policymakers’ assessment of the persistence of inflation pressures.

ECB Policy Expectations and Official Commentary

For the time being, ECB officials are signaling a measured stance. ECB President Christine Lagarde said earlier this week that the institution must remain “completely agile” on interest rates, while emphasizing that it does not have a bias toward tightening.

Despite this cautious message, market pricing continues to reflect expectations for two 25-basis-point rate increases this year. Citing Reuters, the article notes that the probability of a hike at the April meeting remains limited, while a move by June is now seen as almost fully discounted by investors.

Some Governing Council members are explicitly arguing against rushing to tighten. ECB policymaker and Governor of the Bank of France François Villeroy de Galhau stated on Thursday that it is too early to focus on a rate hike in April. He underlined that the ECB needs a critical mass of data before acting and that there is no pre-set trajectory for policy rates.

SNB Minutes Flag Uncertainty but Maintain Policy Stance

On the Swiss side, minutes from the latest Swiss National Bank (SNB) meeting released on Thursday indicated that the outlook for the Swiss economy has become more uncertain, in part due to the war in the Middle East. The central bank projects Swiss Gross Domestic Product (GDP) growth of around 1% in 2026 and about 1.5% in 2027, while noting that economic activity could stay subdued in the near term.

The SNB also highlighted that the recent firming of the Swiss Franc (CHF) has contributed to tighter monetary conditions. Inflation is expected to increase temporarily as higher energy costs feed through, before easing again over the medium term and staying consistent with price stability. In spite of the more uncertain backdrop, the SNB judged that its current policy stance remains appropriate. The release of the minutes did not generate an immediate reaction in the Swiss Franc on foreign exchange markets.

Focus Shifts to ECB Accounts and Further Communication

Market participants are now awaiting the ECB Monetary Policy Meeting Accounts and additional remarks from several ECB officials later in the day. These communications are likely to shape investor response to the latest inflation data and may offer further signals about the central bank’s policy trajectory.

Euro Performance Against Major Currencies

The table below presents the percentage change of the Euro (EUR) against a range of major currencies today. According to this snapshot, the Euro showed its strongest performance versus the New Zealand Dollar.