The Euro steadies against the Swiss Franc, trading around 0.9243 after hitting an 11-month low. This stabilisation follows positive Eurozone business data, with the Eurozone Composite PMI rising to 52.2 in October, the highest in 17 months.

Growth is led by the services sector and manufacturing output has increased for eight months. New orders also rose at the strongest rate in two-and-a-half years, prompting a hiring boost. In Germany, the Composite PMI rose to 53.8, driven by services and manufacturing growth.

Conversely, France’s activity contracted for the fourteenth month, with its Composite PMI below 50.0, affected by weak demand and political issues. This has affected overall Eurozone growth despite Germany’s improvement.

The Swiss National Bank maintained an unchanged policy rate at 0%, citing US tariffs impacting growth. They forecast GDP may fall below 1% by 2026. While inflation is positive, the bank predicts stability over three years and is ready to intervene to prevent excessive Franc appreciation.

Current data shows the Euro has strengthened most against the Canadian Dollar, as detailed in a currency percentage change heat map comparing major global currencies.

Based on the divergence in economic outlooks, we see an opportunity in the EUR/CHF pair. The Eurozone is showing solid growth, with the latest Composite PMI hitting a 17-month high, while the Swiss National Bank remains concerned about its own growth prospects. This fundamental contrast suggests the recent bounce from the 0.9205 low could be the start of a more significant recovery.

The strength is primarily coming from Germany, which is seeing its fastest growth in over two years. Recent Eurostat flash estimates for October showed core inflation holding steady at 2.9%, giving the European Central Bank little reason to consider cutting rates. This backdrop is supportive for the Euro, especially against a currency backed by a central bank that is actively trying to prevent it from getting too strong.

We should consider buying call options on EUR/CHF with a strike price around 0.9300, expiring in late December 2025. This strategy offers a defined-risk way to position for a continued rebound, using the recent 11-month low as a new level of support. Data from the options market shows one-month risk reversals for EUR/CHF have just turned positive, suggesting traders are beginning to bet on upside for the first time since July 2025.

The SNB’s readiness to intervene in currency markets should not be underestimated, as it creates a potential floor for the pair. We remember the massive interventions the SNB conducted back in the mid-2020s to cap the Franc’s strength, and their current concerns over US tariffs only increase the likelihood of similar action. The central bank has essentially told us it does not want a much stronger Franc.

However, we must watch for risks from France’s continued economic contraction, which acts as an anchor on the Euro’s potential. Furthermore, any surprise global risk-off event could trigger a flight to safety, benefiting the Swiss Franc temporarily. Upcoming US employment data will also be critical, as a very strong report could disrupt the trend by boosting the safe-haven appeal of the US Dollar and, by extension, the Franc.