British Pound Dominates Swiss Franc (GBP/CHF) and Japanese Yen (GBP/JPY) Exchange Rates
The Pound (GBP) traded against the Swiss Franc (CHF) between session highs of 1.5352 and session lows of 1.5257 on Tuesday. Conversely the Pound trended against the Japanese Yen (JPY) between the boundaries of 172.7300 and 173.3100.
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The Pound saw a productive day on Tuesday with the publication of UK Markit Composite and Services Purchasing Managers Index (PMI) which proved more productive than forecast.
Composite PMI figures reached 58.8, bypassing the predicted 58. Moreover the Services PMI reached a stunning 59.1 despite only being forecast to attain 58.0.
Economist Chris Williamson commented: ‘The vast services economy’s growth surge shows no sign of abating.’
Wednesday however will show the Swiss Consumer Price Index (CPI) which is currently expected to stagnate at 0.0%.
Wednesday will see the release of the Japanese Coincident Index which will indicate business conditions, alongside the Leading Index which accounts for a number of economic factors suggesting the state of the domestic economy.
Japanese car giant Toyota stated that they’ve calculated their net profit for the latter three months which has reached record highs of $5.7 billion US Dollars (USD).
The Yen has been trading weakly in the currency market of late, however this has allowed gains in other areas.
An expert in the field Tatsuya Mizuno commented: ‘The impact of a weak Yen is fading, although its level right now is still positive for the auto sector. But foreign exchange rates are always an unpredictable factor.’
The Swiss Franc however is also trading lower in the currency market recently, despite favourable PMI data.
The Swiss statement read: ‘Altogether the performance of the subindices reflects the picture of a sound but not outstanding industrial economy in Switzerland.
The geo-political risks and the volatile commodity markets created a challenging situation in purchasing.’
The Pound will await a highly influential day on Thursday with the Bank of England (BoE) announcing their current decision with regards to UK interest rates.
The Pound soared in popularity recently when the BoE teased that interest rates were hovering in the near future; however the British currency has crashed in recent weeks against the US Dollar in particular as the US economy gained more momentum and the BoE backtracked their comments.
Some economists now believe that the central bank board members may take a less unanimous vote than has occurred in the past, with expectations that several board members may vote to increase the interest rates.
Economist James Knightly stated: ‘[The Services PMI] suggests that the UK economy is maintaining its momentum in the third quarter and will increase speculation that one, possibly two members of the Bank of England’s MPC [Monetary Policy Committee] will be voting for a rate rise at Thursday’s policy meeting.’
In the current situation the Pound will prove to be most volatile with such heavy pressures facing it from the Bank of England. However the CHF to JPY exchange rate resided between 112.7300 and 113.2400 on Tuesday; both currencies may see alterations from their respective data publishing.