EUR/CHF slides to multi-month low as Euro struggles amid trade woes

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The Euro (EUR) weakens for the fourth straight day against the Swiss Franc (CHF) on Thursday, pressured by concerns over the recently announced US-EU trade agreement, which investors perceive as one-sided and unfavorable for the European Union (EU).

EUR/CHF drops to its lowest level since May 5, extends four-day losing streak.
The Swiss Franc strengthens on safe-haven demand and strong June Retail Sales data.
US President Donald Trump extends the tariff deadline with Mexico by 90 days, but warns new tariffs will hit countries without finalized deals starting August 1.

At the time of writing, the EUR/CHF cross is hovering near 0.9280, its lowest level since May 5. The pair is down nearly 0.60% so far this week, as the Swiss Franc benefits from safe-haven demand amid rising trade tensions and ahead of the looming US tariff deadline, set to expire on Friday, August 1.

US President Donald Trump announced on Thursday a 90-day extension to the tariff deadline with Mexico. The agreement, reached after a phone call with Mexican President Claudia Sheinbaum, allows both sides more time to finalize a comprehensive trade deal. Existing tariffs such as the 25% levy on autos and 50% on key metals will remain in place. Still, markets remain nervous, as President Trump reiterates his warning that new tariffs will be imposed on countries without finalized trade deals starting August 1. A White House official confirmed that tariff rates for most major trading partners have already been finalized. The lack of clarity over which countries will be affected, combined with the looming deadline, is fueling investor anxiety and adding to broader trade-related uncertainty.

Fresh data released by the Swiss Federal Statistical Office on Thursday further boosted demand for the safe-haven Franc. Real Retail Sales rose 3.8% YoY in June, sharply beating expectations of 0.2% and accelerating from May’s upwardly revised 0.3% (previously 0%). On a monthly basis, Retail Sales climbed 1.5% in June, rebounding from a revised 0.4% drop in May and marking the first positive reading in five months.

Meanwhile, recent Eurozone data has done little to inspire confidence in the shared currency. The preliminary estimate for Q2 2025 Gross Domestic Product (GDP) showed the Euro area economy expanded by just 0.1% QoQ, indicating a sharp slowdown from Q1 and underscoring weak underlying momentum across core economies. Inflation figures were mixed but generally subdued, with Germany’s Consumer Price Index (CPI) easing to 1.8% YoY in July, below the 1.9% forecast, while Italy’s CPI slipped to 1.7% YoY amid seasonal pricing effects.

Looking ahead, market attention will turn to the Eurozone’s preliminary inflation data for July, set for release on Friday. The release will be critical in shaping expectations for the European Central Bank’s (ECB) next move, especially amid persistent uncertainty over price pressures and weak growth across the bloc.

Economic Indicator

Core Harmonized Index of Consumer Prices (MoM)

The Core Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The MoM figure compares the prices of goods in the reference month to the previous month. Core HICP excludes volatile components like food, energy, alcohol, and tobacco. The Core HICP is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.