CHF was among the big losers yesterday with EUR/CHF rising 1.5% during yesterday's session, Danske Bank's FX analyst Kirstine Kundby-Nielsen reports.

Global developments taking center stage

"While Swiss inflation surprised slightly to the topside, this failed to aid the Swiss Franc. Headline inflation came in at 0.3% y/y (cons: 0.2%, prior: 0.4%) and core at 0.9% y/y (cons: 0.7%, prior: 0.9%). This leaves inflation set to meet the SNB's expectation of 0.3% y/y in Q1."

"Domestic inflation continues to edge lower aided by a decline in the reference interest rate for rents, which should keep the SNB on track to deliver a 25bp cut at the next meeting on March 20. Markets scaled slightly back on pricing, pricing 21bp for the meeting and 33bp for the remainder of the year."

"For EUR/CHF however, domestic Swiss data releases seem to be of the least concern with global developments taking center stage. Key for the cross will be whether the recent EUR optimism fueled by a significant change in approach to fiscal policy and debt rules in Germany, will continue and whether risk-appetite holds up."