• EUR/CHF trades around 0.9230 on Thursday, virtually unchanged on the day, after rebounding from 0.9198.
• Eurozone inflation accelerates in March, reinforcing expectations of a vigilant ECB stance.
• SNB minutes provide additional clues on the monetary policy outlook.

EUR/CHF trades around 0.9230 on Thursday at the time of writing, virtually unchanged on the day. The pair is nevertheless rebounding from its intraday low of 0.9198 reached earlier in the day, following the release of the Eurozone’s March inflation data.

According to revised figures, the Eurozone Harmonized Index of Consumer Prices (HICP) increased by 1.3% MoM in March, accelerating from a 0.6% rise in February and slightly exceeding the preliminary estimate of 1.2%. On an annual basis, inflation was revised higher to 2.6%, marking its highest level since July 2024 and rising from 1.9% previously. Meanwhile, core inflation, which excludes energy, food, alcohol and tobacco, was revised to 2.3% YoY, slightly below the preliminary estimate of 2.4% and February’s 2.4%.

The increase in the headline inflation, while the core reading was revised lower, suggests that energy prices are indeed exerting upward pressure on price dynamics in the region. This trend could encourage the European Central Bank (ECB) to adopt a more hawkish tone at its next monetary policy meeting scheduled for April 29-30. The accounts of the ECB’s March 19 policy meeting, due later on Thursday, may offer further insight into how policymakers assess the persistence of inflationary pressures.

For now, ECB officials favor a cautious approach. ECB President Christine Lagarde said earlier this week that the central bank needs to remain “completely agile” on interest rates, while stressing that it does not have a bias toward tightening. Nevertheless, financial markets continue to anticipate two 25-basis-point rate hikes this year. According to Reuters, the probability of a rate increase at the April meeting remains limited, but a move by June is now almost fully priced in by investors.

Some policymakers are also urging caution. ECB policymaker and Governor of the Bank of France François Villeroy de Galhau said on Thursday that it is premature to focus on a rate hike at the April meeting, noting that the ECB needs a critical mass of data before taking action and that there is no predetermined path for interest rates.

On the Swiss side, the Swiss National Bank (SNB) meeting minutes released on Thursday indicate that the country’s economic outlook has become more uncertain due to the war in the Middle East. The central bank expects Swiss Gross Domestic Product (GDP) growth of around 1% in 2026 and about 1.5% in 2027, while acknowledging that activity could remain subdued in the near term.

The SNB also noted that the recent appreciation of the Swiss Franc (CHF) has tightened monetary conditions. Inflation is expected to rise temporarily due to higher energy prices before declining again in the medium term and remaining consistent with price stability. Despite the uncertain outlook, the central bank considers that the current monetary policy stance remains appropriate. The minutes triggered no immediate reaction from the Swiss Franc in the foreign exchange market.

Attention now turns to the ECB Monetary Policy Meeting Accounts, as well as speeches from several ECB officials later in the day, which could provide further reactions to the latest inflation data and offer additional clues about the central bank’s policy outlook.