Germany’s Inflation Data

The Euro is currently valued at 0.9318 against the Swiss Franc. Analysts are closely examining new economic data from Europe and Switzerland. In Switzerland, the GDP fell by 0.5% in Q3, which is worse than the expected decline of 0.4%. This marks a turnaround from a 0.2% growth seen in Q2. In the Eurozone, France’s harmonized Consumer Price Index held steady at 0.8% year-over-year, instead of the predicted 1.0%. Meanwhile, Italy saw a 0.1% increase in GDP for Q3, surpassing expectations and improving from Q2, with an annual growth of 0.6%. November inflation in Italy decreased to 1.1% year-over-year. Germany’s inflation data varied in November. The monthly headline CPI dropped by 0.2%, while the annual rate remained at 2.3%. The harmonized HICP fell by 0.5% monthly but increased to 2.6% year-over-year. Unemployment rose by 1,000, keeping the rate steady at 6.3%. Today, the Euro has gained slightly against major currencies like the British Pound, but trends against the US Dollar and Yen are mixed. The currency heat map illustrates the percentage changes among major currencies, showcasing the Euro’s strength across different pairings. The Euro faces challenges due to mixed economic signals from key member states. Slowing French inflation and minimal growth in Italy indicate a cooling trend across the Eurozone. This situation raises concerns among derivative traders about further weakness in the Euro, especially against safe-haven currencies like the Swiss Franc.

Switzerland’s Economic Outlook

Recent flash estimates from Eurostat for November’s inflation show a drop to 1.9%, just below the European Central Bank’s 2% target. In light of this data, we expect the market to begin pricing in a possible ECB rate cut in the first quarter of 2026. Options traders should be alert for chances to take bearish positions on the Euro, as implied volatility may rise before the next ECB meeting. Switzerland’s disappointing GDP figures are being overshadowed by the Swiss Franc’s appeal as a safe-haven currency, but this strength raises concerns for the Swiss National Bank (SNB). We remember the turmoil in 2015 when the SNB unexpectedly ended its currency peg, and historically, they have a low tolerance for a rapidly rising Franc. The risk of intervention by the SNB to weaken the Franc is now higher, complicating any direct short positions in EUR/CHF. Given the current conditions in EUR/CHF, a more straightforward way to bet against the Euro may be against the US Dollar. Recent data from the Commitment of Traders shows that large speculators have been increasing their net-short positions on the Euro, reaching levels not seen since the energy crisis of 2022. This indicates a growing consensus around ongoing Euro weakness, supporting strategies such as selling EUR/USD futures or buying bearish option spreads. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now