Swiss Franc's strong performance and soft inflation raised the expectations of SNB's action, while Euro's recent strength was under a thorough investigation amid economic headwinds and speculation about the future ECB reduction, Rabobank's analyst Jane Foley.
EUR/USD returns after April's rally
“The safe haven CHF is the best performing G10 currency since US President Trump's Rose Garden tariff address on April 2, having rallied a little over 7% vs. The USD in that period. Yesterday Swiss April CPI inflation registered a softer than expected flat y/y, while the core reading softened to 0.6% y/y from 0.9% y/y the previous month.
“There is a very powerful chance that SNB will reduce the June 19 policy rates again. Sentiment, following Schlegel's statements, the CHF is currently worse to perform G10's money in a 1-day view, in contrast to Safe Haven Jpy standing at the top of the G10 performance table today.”
“Having reached a peak close to EUR/USD1.1573 on April 21, EUR/USD has tested the water below the 1.13 level in recent sessions. Last week's softer tone in EUR/USD reflected optimism regarding US trade deals, though this is now showing signs of petering out. By trade frictions and to some extent by EUR strength, the market continues to expect further ECB rate cuts starting with another move in June
