EUR/CHF steady as markets digest Swiss inflation and Eurozone data

The Euro (EUR) trades little changed against the Swiss Franc (CHF) on Thursday, with markets digesting fresh economic data from Switzerland and the Eurozone. At the time of writing, EUR/CHF is trading around 0.9313, snapping a two-day winning streak.

Data released by the Swiss Federal Statistical Office showed that the Consumer Price Index (CPI) stabilised in December, rising 0.0% on the month after a 0.2% decline in November and beating market expectations for a 0.1% drop. On an annual basis, CPI rose 0.1% in December, in line with forecasts, after stagnating at 0.0% in November.

The figures reinforced expectations that the Swiss National Bank (SNB) will keep interest rates unchanged in the months ahead, allowing it to maintain a cautious stance while easing market fears over a possible return to negative interest rates.

 At its December 11 policy meeting, the Swiss National Bank left its key interest rate unchanged at 0%. Minutes from the meeting, released earlier in the day, showed that policymakers saw little urgency to adjust policy at this stage. “The Governing Board found that there was currently no need for monetary policy action,” the SNB said. “Neither a tightening of monetary policy nor a further easing of monetary policy would be appropriate at this juncture.”

In the Eurozone, the European Commission’s Business Climate Index improved to -0.56 in December from -0.66 previously, pointing to a modest stabilisation in corporate conditions. Consumer Confidence strengthened to -13.1 from -14.6, while the Economic Sentiment Indicator edged lower to 96.7 from 97.1.

On the inflation front, Eurozone Producer Price Index (PPI) rose 0.5% on the month in November, accelerating from 0.1% previously and beating market expectations of 0.2%. On an annual basis, producer prices fell 1.7%, marking the fourth consecutive month of YoY decline. Meanwhile, the Eurozone Unemployment Rate eased to 6.3% in November from 6.4%.

ECB Vice President Luis de Guindos said on Thursday that the current level of interest rates is “appropriate,” adding that inflation is now at target, though uncertainty remains very high.

Looking ahead, Switzerland is set to release its latest Unemployment Rate on Friday. In the Eurozone, markets will monitor Retail Sales figures, alongside Germany’s Industrial Production and Trade Balance data.