• EUR/CHF holds steady as markets digest preliminary Eurozone inflation data.
• Cooling annual inflation supports the ECB’s wait-and-see stance on interest rates.
• Focus shifts to Swiss CPI on Thursday for fresh clues on the SNB outlook.

The Euro (EUR) holds firm against the Swiss Franc (CHF) on Wednesday as traders digest the latest preliminary Eurozone inflation figures. At the time of writing, EUR/CHF is trading around 0.9302, little changed on the day.

Data released earlier in the day by Eurostat showed that Eurozone inflation remained broadly stable at the end of 2025. The Harmonized Index of Consumer Prices (HICP) rose 2.0%YoY in December, matching market expectations and easing from 2.1% in November. On a monthly basis, headline inflation rose 0.2%, reversing November’s 0.3% decline.

Core inflation, which strips out volatile food and energy prices, softened slightly. Core HICP rose 2.3% YoY, coming in just below the 2.4% consensus estimate and down from 2.4% previously. On a monthly basis, core inflation rose 0.3%, reversing the 0.5% fall seen in November.

Overall, the data point to tentative cooling in annual inflation pressures, though the rebound in monthly readings suggests the disinflation trend remains uneven. With headline inflation sitting at the ECB’s 2% target, the figures support the central bank’s current stance to keep interest rates unchanged. particularly after Tuesday’s final Composite Purchasing Managers Index (PMI) figures came in slightly weaker than expected.

This comes after inflation data from Germany, the bloc’s largest economy, released on Tuesday, pointed to a sharper cooling in price pressure. Germany’s national Consumer Price Index (CPI) rose 1.8% YoY in December, easing notably from 2.3% in November, while the monthly reading was flat at 0%. Meanwhile, final Composite PMI figures also came in slightly weaker than expected.

According to a BHH Market View report, the swaps curve prices in steady interest rates over the next twelve months, followed by a 25 basis point (bps) increase to 2.25% over the next two years.

Looking ahead, attention now turns to Swiss inflation data due on Thursday. Economists expect the Consumer Price Index (CPI) to fall 0.1% month over month in December, following a 0.2% decline previously, while annual inflation is seen edging up slightly to 0.1% from 0.0%.

A weaker-than-expected print could reinforce worries over persistently low inflation and fuel talk of a possible return to negative rates. That said, Swiss National Bank (SNB) policymakers have repeatedly stressed that the bar for a return to negative interest rates remains high.