The EUR/CHF exchange rate has climbed to a two-week high as the Swiss Franc depreciated against major currencies amid a positive global risk sentiment. Global markets are optimistic ahead of the Trump-Xi meeting at the APEC summit, with hopes for a US-China trade agreement lifting global equities and reducing demand for safe-haven assets like the Swiss Franc.

The current EUR/CHF trading rate is approximately 0.9274, reflecting a 0.30% increase following an intraday low of 0.9238. The Swiss ZEW Expectations Index showed a recovery in sentiment, rising to -7.7 in October from -46.4. While this indicates a less pessimistic six-month economic outlook, it did not strengthen the Swiss Franc as broader market narratives took precedence and traders awaited the Federal Reserve’s interest rate decision.

Eurozone Monetary Policy

In the Eurozone, focus shifts to the European Central Bank’s policy decision, with expectations of maintaining the Deposit Facility rate at 2.00% for the third time. Stable inflation and improving business activity support this stance, which might bolster the Euro’s position. The Swiss Franc showed varying percentage changes against global currencies, being strongest against the British Pound.

We are looking at a market environment that feels familiar, but the fundamental reasons for EUR/CHF strength have evolved significantly since the days of the Trump-Xi trade summits. Back then, short-term risk sentiment drove the pair, causing temporary weakness in the safe-haven Swiss Franc. Today, the story is much more structural and tied to central bank policy.

The key driver now is the substantial interest rate differential, which is far more pronounced than it was years ago. As of late October 2025, the European Central Bank’s deposit rate stands at 3.50%, while the Swiss National Bank’s policy rate is holding at 1.75%. This wide gap makes holding the Euro more profitable than holding the Franc.

This policy divergence is supported by persistent inflation data, as we’ve seen Eurozone inflation hovering around a stubborn 2.8% year-over-year. In contrast, Switzerland has managed to keep its inflation much lower, with recent figures coming in near 1.5%. The ECB therefore has a clear mandate to maintain higher rates for longer.

Derivative Trading Opportunities

For derivative traders, this creates a clear opportunity in the coming weeks. The positive carry on a long EUR/CHF position is compelling, meaning we can profit simply from holding the position over time. This suggests selling out-of-the-money puts to collect premium, as the interest rate differential should provide a strong floor for the pair.

We should also consider buying call options on EUR/CHF with a one-to-two-month expiry. With the pair currently trading around 0.9650, a move toward the psychologically important parity level (1.0000) seems increasingly plausible if the ECB signals a hawkish stance into year-end. This strategy offers a defined risk with significant upside potential.

However, we must remain aware of the Franc’s safe-haven status, a characteristic that has not changed over the years. Any unexpected global economic slowdown or increase in geopolitical tension could trigger a rapid flight to safety. This would quickly strengthen the Franc and challenge our long Euro positions.

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