EUR/CHF holds near two-week highs as Swiss Franc weakens on fading safe-haven demand

• EUR/CHF holds near two-week highs as fading safe-haven demand weighs on the Swiss Franc.
• The Eurozone preliminary inflation data show price growth moving closer to the ECB's 2% target.
• SNB's Tschudin reiterates readiness to intervene or reintroduce negative rates if required.

The Euro (EUR) trades on the front foot against the Swiss Franc (CHF) on Friday as fading safe-haven demand keeps the Franc under pressure. At the time of writing, EUR/CHF is trading around 0.9287, holding firm near a two-week high as investors digest the latest Eurozone inflation figures.

Preliminary data released by Eurostat showed that the Core Harmonized Index of Consumer Prices (HICP) rose 0.3% MoM in October, accelerating from 0.1% in September. On an annual basis, core inflation stood at 2.4% YoY, slightly above the 2.3% consensus and unchanged from September.

Meanwhile, headline HICP inflation increased 0.2% MoM in October, compared with a 0.1% increase in September. On a yearly basis, headline inflation eased to 2.1%, in line with forecasts, down from 2.2% in the prior month.

The preliminary data show price growth continuing to move closer to the European Central Bank's (ECB) 2% target, supporting the central bank's current "on-hold" stance.

On Thursday, the ECB left all three key policy rates unchanged, with the Deposit Facility, Main Refinancing, and Marginal Lending Rates holding steady at 2.00%, 2.15%, and 2.40%, respectively. The Governing Council noted that inflation is now near its medium-term target, and its overall assessment of the inflation outlook remains broadly unchanged.

On the Swiss side, the latest data showed that Real Retail Sales rose 1.5% YoY in September, marking a notable rebound from a 0.3% increase in August and a revised -0.4% reading in July.

On Thursday, Swiss National Bank (SNB) Governing Board Member Petra Tschudin reiterated that the SNB's monetary policy remains expansive and that inflation is expected to stay within the range of price stability.

She emphasized that the level of the Franc is not important in itself, but rather its impact on inflation, adding that the central bank is prepared to intervene in the currency market if necessary and would reintroduce negative interest rates should conditions warrant, noting that "we know they work."