Swiss Data Triggers Profit-Taking in EUR/CHF and USD/CHF

The Swiss National Bank's (SNB) policy expectations remain unchanged despite stronger-than-expected economic data from Switzerland. The August Consumer Price Index (CPI) and second-quarter Gross Domestic Product (GDP) releases surprised to the upside, triggering profit-taking in EUR/CHF and USD/CHF.

Societe Generale strategists note that while the strong data may encourage buyers to take advantage of dips in these currency pairs, there is still a risk of renewed focus on French fiscal and political risks reviving the Swiss Franc's strength. The strategists point out that wider G10/SNB rate differentials and low FX volatility could support EUR/CHF dip-buying.

The projection for inflation to 'initially continue to increase slightly in the coming quarters, before declining again somewhat in the first half of 2027' suggests that SNB policy expectations remain unchanged. The average inflation rate of 0.6% so far in Q3 is in line with the June forecast.