The EURCHF exchange rate is waiting for Swiss growth data on Thursday to guide the next path for the pair.
EURCHF – Daily Chart
The price of EURCHF has been moving lower since the 0.94259 resistance test. The next downside target is 0.92652 if the data supports the CHF.
Swiss GDP growth data will be released at 3 pm HKT on Thursday, with analysts expecting a 0.1% reading, down from 0.5%. A surprise to the upside could see the CHF franc gain.
Switzerland’s economy grew by only 0.1% in the second quarter, and the sharp slowdown from Q1 was due to pharmaceutical companies speeding up exports to avoid Trump’s tariffs.
Another weak number would add pressure on the Swiss central bank to potentially lower interest rates into negative territory as it bids to boost economic activity. The country’s President has been criticized for the U.S. trade negotiations.
“Luck is running out for the Swiss economy,” said Melanie Debono, an economist at Pantheon Macroeconomics.
The second half “will be ugly”, Debono added, as Switzerland could plunge into a “short, shallow recession” following Trump’s 39% tariff on Swiss goods, the highest of any developed country. A recent flash estimate by the State Secretary for Economic Affairs provided limited details. The Swiss statistical authority stated that gains in the services sector have offset a “negative performance in industry,” and analysts will place more weight on the GDP number.
“Given the combination of weak growth, low inflation and ongoing tariff risks, we expect the SNB [Swiss National Bank] to cut its policy rate by 25 [basis points] in September,” Goldman Sachs economists said in a recent investment note.
BNP Paribas economists are also bearish, predicting that tariffs could subtract an additional 0.3 percentage points from Swiss GDP by the end of next year. The Swiss Franc regained some strength after the European Central Bank said it sees no reason to lower interest rates again, hurting the euro against other major currencies.
ECB member Olli Rehn said the current inflation level is “in a good place” and added that “any insurance cut just for its own sake wouldn’t be necessary”.
