The EUR/CHF pair settled below recent high of 0.9192, its strongest level since April 30th.
Geopolitical tensions in the Middle East have been a persistent drag on the Euro this week. Brent Oil prices holding above $90 are adding to the cost burden for oil-importing economies in the Eurozone, weighing on sentiment toward the Euro.
Also, reports that Hezbollah has rejected a ceasefire proposal in Lebanon have further reduced expectations for a quick resolution to Iran’s war and a rapid reopening of the key Strait of Hormuz.
In the meantime, the Swiss Franc rose even after the latest inflation figures came in weaker than markets had anticipated, tempering forecasts for tighter policy by the Swiss National Bank.
Annual consumer price inflation in Switzerland held at 0.6% in May. While this print matched the prior reading and represented the highest level since late 2024, it fell short of the 0.8% expected by economists, prompting market participants to reassess the likelihood of a near-term SNB rate hike.
SNB Chairman Martin Schlegel indicated that medium-term inflation dynamics had not materially shifted, even though short-term price pressures have shown some recent increases.
In response, investors have adjusted their expectations and now largely foresee the SNB maintaining its key policy rate at 0% through the end of the year.
The minor Forex pair gained 0.42% for the week.
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