EUR/CHF hovers near three-month high as traders await SNB’s rate call

The Euro (EUR) trades on the back foot against the Swiss Franc (CHF) on Tuesday, with EUR/CHF consolidating near its strongest level in more than three months as the Franc remains under sustained pressure ahead of Thursday’s Swiss National Bank (SNB) monetary policy announcement.

At the time of writing, the cross is trading around 0.9380, holding close to Monday’s peak, its highest level since September 5.

Markets widely expect the SNB to keep interest rates unchanged at 0.00% this week, maintaining the status quo for a third consecutive meeting. According to a Reuters poll, 38 of 40 economists forecast no change at the December 11 decision, while just two anticipate a return to -0.25%. Reuters also reported that 21 of 25 economists expect the policy rate to stay at 0.00% through end-2026, with only a few anticipating any cut next year.

At its September meeting, the SNB signalled confidence in its current policy stance, noting that inflation had eased toward the lower end of its 0-2% target band and that existing settings remained appropriate.

Policymakers also reiterated that the bar for returning to negative interest rates is high, even as the Franc’s strength and softer domestic momentum have reduced inflation pressures. The central bank maintained its guidance that inflation is likely to edge slightly higher in the coming quarters.

On the Euro side, the European Central Bank (ECB) is set to deliver its interest rate decision on December 18, where policymakers are also expected to keep rates unchanged. Recent ECB minutes showed unanimous backing for leaving all three key policy rates steady in October, with the Governing Council describing the current stance as “in a good place.” Officials also highlighted the value of waiting for December’s updated projections before considering any further adjustments.

Remarks on Monday reinforced the steady policy message. ECB’s Peter Kazimir said he sees “no reason to change rates in the coming months, definitely not in December,” adding that reacting to small deviations in inflation would risk introducing unnecessary policy uncertainty.

Separately, in a Bloomberg interview published Monday, Isabel Schnabel said she is “rather comfortable” with expectations that the ECB’s next move could eventually be a hike, although she stressed that any such step is not imminent.