EUR/CHF slides to two-week low as Swiss Franc strengthens on US-Switzerland trade optimism

• EUR/CHF extends losses, hitting its lowest level since October 31 as the Swiss Franc outperforms across majors.
• Franc gains traction after US President Trump confirms talks to lower US tariffs on Swiss exports from 39% to around 15%.
• Soft German ZEW data and cautious ECB commentary weigh on the Euro.

The Euro (EUR) weakens against the Swiss Franc (CHF) on Tuesday as the Franc shows relative strength among major peers amid optimism over a potential US-Switzerland trade deal. At the time of writing, EUR/CHF trades around 0.9270, its lowest level since October 31, down about 0.30% on the day, as investors favor the Swiss currency across the board.

The Franc's latest advance comes after US President Donald Trump confirmed on Monday that Washington is "working on a deal to get their tariffs a little bit lower," referring to import duties imposed on Swiss goods. "I haven't set any number, but we're going to be working on something to help Switzerland," Trump said.

According to Reuters, the prospective agreement could reduce the current 39% tariff on Swiss exports to around 15%, with negotiations said to be in their final stages, though Swiss officials have so far declined to comment.

Adding to the Euro's softness, German and Eurozone ZEW sentiment data offered a mixed signal on Tuesday. The German ZEW Economic Sentiment Index slipped to 38.5 in November, below forecasts of 40.0 and down from 39.3 in October. The Current Conditions Index improved modestly to -78.7 from -80.0, yet still undershot expectations of -77.5.

Meanwhile, the Eurozone ZEW Economic Sentiment Index rose to 25.0, beating the consensus estimate of 23.5 and the previous reading of 22.7, signaling a modest improvement in regional expectations despite lingering concerns over Germany's slowdown.

Comments from European Central Bank (ECB) policymakers on Tuesday also did little to support the Euro. Several officials struck a balanced tone, suggesting that monetary policy is appropriately calibrated and that inflation risks are broadly even. ECB Executive Board member Frank Elderson said the "current rates level is appropriate," adding that "inflation risks are balanced."

Governing Council member Boris Vujčić noted that the Eurozone has experienced "slightly higher growth and inflation than forecast" and that "economically, we are in a good place." ECB's Olaf Sleijpen warned that "public spending can boost inflation in the short term," while cautioning that "fiscal disparities can weaken policy transmission."

Looking ahead, the economic calendar remains relatively light for Switzerland, with focus on Producer and Import Prices due Thursday. On the Euro side, attention turns to Germany's final inflation figures on Wednesday, followed by the Eurozone Economic Bulletin and Industrial Production data on Thursday. The week concludes with key releases on Eurozone employment and seasonally adjusted Gross Domestic Product (GDP) on Friday.