EUR/CHF continues to recover while Swiss inflation remains weak

The EUR/CHF pair is attracting buyers for the second consecutive day this Thursday. The cross rises to 0.9381 during the European session 🚀. It seems that a mix of soft Swiss inflation data and weaker European retail sales is driving this movement.

The Swiss CPI remained at 0.2% year-on-year in August. As expected. It reflects quite moderate price pressure 📉. Monthly, it fell by 0.1%. Worse than expected. These figures show a disinflationary environment that the BNS has been fighting for some time. Markets are already speculating on a softer stance if domestic demand continues to weaken.

In the Eurozone, something similar. Retail sales in July fell by 0.5% month-on-month. More than expected. A notable reversal after rising 0.6% in June 📊. Year-on-year, they grew by 2.2%. Also below forecasts. Looking at the breakdown, food and fuel declined. Non-food products barely increased a little. Household demand is not at its best.

For the BNS, this CPI data is revealing. Price pressures remain very weak. They already cut their rate to zero in June, and it doesn't seem like they will change course soon 🌕. The ECB, on the other hand, has a different outlook. Eurozone inflation rose to 2.1% in August, with core at 2.3%. Meanwhile, consumption is weakening.

Swiss unemployment remained at 2.9% in August. The labor market is holding up well there. In the Eurozone, we will have data for the second quarter tomorrow. Employment is expected to rise by 0.1% quarter-on-quarter and 0.7% year-on-year. GDP, they say, will grow by 0.1% quarter-on-quarter and 1.4% year-on-year 🔥. We will see.

In case you're interested, 149 Swiss francs is about 159.57 euros according to current rates. That's how the market is between these currencies today 💱.