EUR/CHF steadies as Eurozone PMI improves

• EUR/CHF firms as stronger Eurozone PMI readings boost sentiment toward the common currency.
• Eurozone business activity hits a 17-month high as the Composite PMI rises to 52.2 in October.
• SNB minutes reaffirm dovish tone, with policymakers keeping rates at 0% and warning of tariff-related risks.

The Euro (EUR) steadies against the Swiss Franc (CHF) on Friday as upbeat Eurozone business activity data underpins the single currency. At the time of writing, EUR/CHF trades around 0.9243, rebounding modestly after hitting an 11-month low near 0.9205 earlier this week.

The latest HCOB Flash Eurozone Purchasing Managers Index (PMI) survey painted a more optimistic picture for the region’s economy at the start of the fourth quarter. The Composite PMI climbed to 52.2 in October from 51.2 in September, marking a 17-month high and the tenth straight month above the 50.0 growth threshold.

Growth was led by the services sector, where activity expanded at the fastest pace since August 2024, while manufacturing output rose for an eighth straight month. New orders increased at the strongest rate in two-and-a-half years, encouraging firms to hire again after a brief slowdown in September.

In Germany, the bloc’s largest economy, growth momentum accelerated further, with the Composite PMI jumping to 53.8 from 52.0, its highest in 29 months. The improvement was fueled by a robust services recovery and a modest pickup in manufacturing output.

By contrast, France continued to struggle, with business activity contracting for the fourteenth consecutive month. The French Composite PMI remained below the 50.0 threshold, as weak demand and political uncertainty weighed on confidence. Economists noted that France’s sluggish performance has become a drag on the wider Eurozone recovery, limiting the overall pace of growth despite stronger German momentum.

On the Swiss side, the Swiss National Bank’s (SNB) September meeting minutes, released Thursday, confirmed policymakers’ decision to keep the policy rate unchanged at 0%, maintaining a broadly accommodative stance. Officials acknowledged that new US tariffs on Swiss exports are weighing on growth prospects and could drag GDP below 1% in 2026.

While inflation has returned to positive territory, the SNB expects it to remain within the range consistent with price stability over the next three years. Officials also reiterated that the central bank remains ready to intervene in the foreign exchange market if necessary to counter excessive Franc appreciation. The minutes also highlighted that monetary conditions remain expansionary, supporting domestic activity even as external risks persist.