EUR/CHF retreats on disappointing EU data

The EUR/CHF pair fell 0.5% on Tuesday due to mixed results from the pan-EU Purchasing Managers’ Index (PMI) data print. Germany’s PMIs for October were mixed, with a minor uptick in the Manufacturing component failing to offset a steeper-than-expected decline in the Services side of the indicator.

The German Services PMI also fell into contraction territory, falling into contraction territory once more and printing at 48.0 versus the forecast 50.0. Eurozone Preliminary Manufacturing PMI unexpectedly dropped to 43.0 in October versus 43.7 expected. On the pan-EU side, PMIs came in broadly red, missing market estimates.

Purchasing manager expectations across the European Bloc’s manufacturing sectors are expecting conditions to continue to deteriorate, while PMIs for the services component ticked lower, failing to hold steady at September’s index print. EU-wide Manufacturing PMIs settled into 43.0 versus the expected uptick into 43.7, while the Services component printed at 47.8, failing to hold at 48.7 as markets expected.

Euro traders will be looking ahead to Switzerland’s latest ZEW business expectations survey due on Wednesday, followed by a speech from European Central Bank (ECB) President Christine Lagarde.

The Swiss expectations survey last printed at a begrudging -27.6, while ECB President Lagarde will be speaking while attending a dinner hosted in Athens by the Bank of Greece.

The Euro remains firmly underbid against the CHF after setting a new low of 0.9417 for 2023 last Friday. A bearish continuation of the long-term trend will see the pair crack new lows for the year below 0.915, opening up the way to make a run at 2022’s bottom bids of 0.9409.

A break below this level would represent new all-time lows for the EUR/CHF since the creation of the EU currency bloc.