EUR/CHF dips as French political crisis deepens following PM Lecornu's resignation

• EUR/CHF edges lower on Monday as France's political turmoil weighs on the Euro.
• The Euro is under broad pressure amid political uncertainty after French PM Lecornu's resignation just 27 days into office.
• Eurozone Retail Sales rose 0.1% MoM in August, in line with forecasts, while annual growth slowed to 1.0% from 2.1% in July.

The Euro (EUR) trades on the back foot against the Swiss Franc (CHF) on Monday, with EUR/CHF briefly sliding to its lowest level since September 10. At the time of writing, the cross is stabilizing somewhat, trading around 0.9320, down about 0.20% on the day as renewed political jitters in Europe weigh on the common currency.

The Euro is under heavy pressure across its major peers as traders react to the abrupt resignation of French Prime Minister Sébastien Lecornu, who stepped down on Monday just hours after unveiling his new cabinet. His exit, after only 27 days in office, underscores the deepening political crisis in France, leaving President Emmanuel Macron with a stark choice to either appoint a sixth prime minister in less than two years or dissolve the National Assembly and call a fresh parliamentary election.

Eurozone data offered only limited support to the common currency, with Retail Sales rising 0.1% month-on-month in August, matching forecasts after a revised 0.4% decline in July (initially reported as -0.5%). On an annual basis, sales grew 1.0%, slowing from a revised 2.1% in July (previously 2.2%) and highlighting softening consumer demand in the bloc.

Adding to the narrative, European Central Bank (ECB) Governing Council member José Luis Escrivá noted on Monday that inflation expectations remain anchored at 2%, and said current interest rates are adequate as the ECB is "at target." He described the Eurozone's stance as a "comfortable situation" but emphasized the need to remain agile and ready to react if conditions change. His remarks helped the Euro limit losses, although the overall market mood remains cautious.

On the Swiss side, the latest labor market data showed the seasonally adjusted Unemployment Rate rising slightly to 3.0% in September from 2.9% in August, signaling a modest cooling in labor market conditions. The slight uptick, however, had little impact on demand for the Swiss Franc, which remains supported by safe-haven flows amid Europe's political uncertainty.