Euro weakens against the Franc after soft Swiss GDP and uneven Eurozone data

• EUR/CHF trades softer around 0.9318 as the Euro loses ground against the Swiss Franc on Friday.
• Swiss GDP shrank 0.5% in Q3, undershooting expectations and highlighting a loss of momentum in the Swiss economy.
• Eurozone data was mixed, with French inflation staying subdued, Italy’s GDP offering a small upside surprise, and Germany’s HICP rising to 2.6% YoY.

The Euro (EUR) trades on the back foot against the Swiss Franc (CHF) on Friday, with EUR/CHF hovering around 0.9318 as markets digest a fresh round of economic data from both sides of the bloc.

Switzerland’s third-quarter Gross Domestic Product (GDP) contracted 0.5% QoQ, surprising to the downside relative to the expected 0.4% drop and reversing the 0.2% expansion recorded in Q2. On a yearly basis, growth slowed to 0.5%, down sharply from 1.3% in the prior quarter.

On the Euro side, France’s preliminary harmonised Consumer Price Index (CPI) held at 0.8% YoY, below the 1.0% forecast and unchanged from the previous month. Italy delivered a more constructive signal through its final Q3 GDP figures, with output rising 0.1% QoQ, beating the 0.0% forecast and up from 0.0% in Q2, while the annual rate increased to 0.6% YoY, above the 0.4% forecast and higher than 0.4% in the prior quarter.

Italy’s preliminary November inflation readings showed the harmonised HICP easing to 1.1% YoY, down from 1.3% in October, while CPI stayed at 1.2% YoY, the same as in October.

Germany’s latest preliminary November inflation data delivered a mixed but broadly contained picture. Headline CPI fell 0.2% on the month, compared with a forecast for a 0.3% decline and a 0.3% increase in October, while the yearly rate held at 2.3%, slightly below the expected 2.4% and unchanged from October.

Germany’s harmonised HICP figures added to the mixed tone, with prices falling 0.5% on the month, a slightly softer decline than expected, after a 0.3% increase in October. The annual rate rose to 2.6%, above the 2.4% forecast and up from 2.3%. Labour market conditions were broadly steady, with unemployment increasing by 1,000 in October, a smaller rise than the 5,000 expected, after a decline of 1,000 in the prior month, leaving the Unemployment Rate unchanged at 6.3%.