British Pound to Swiss Franc (GBP/CHF) Exchange Rate Holds above 5-Day High on Low Consumption
Despite trader risk sentiment fading as geopolitical tensions between Israel and Syria advance; the Pound has gained against the Swiss Franc on lower-than-expected Swiss consumption.
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The Pound Sterling to Swiss Franc exchange rate is currently trending in the region of 1.5434.
The long build up to the Scottish Independence referendum was fraught with complications; successive opinion polls indicated different results, with the lead changing hands a number of times. The confusion sent Sterling crashing down to record-lows against the majority of its most traded currency competitors. Once the Unionists had gained victory, however, Sterling rebounded with a vengeance as demand for the British currency increased exponentially. The dramatic increase created some appealing selling positions and Sterling was brought back down with a bang after traders locked in their profits.
Tuesday saw the Pound continue to trend lower against the majority of its rivals after economic data failed to impress. One of the more disappointing prints was Public Sector Net Borrowing which indicated that government debt rose from -1.1 billion to 10.9 billion.
The Swiss Franc has struggled ever since the Swiss National Bank cut its 2015 inflation forecast to 0.2% and reduced its Gross Domestic Product forecast from 2.1% to 1.3% for 2014. Further reductions were posted on Monday after the Swiss money supply reduced from 3.5% to 3.4%.
The Pound Sterling to Swiss Franc exchange rate has hit a low today of 1.5382.
With a lack of British data on Wednesday the Pound has generally continued to trend lower against the majority of its currency peers. The losses were compounded by Prime Minister David Cameron after he said Britain have no choice but to get involved with the situation in Northern Iraq. As the US continues to launch air strikes on Iraq and Syria Cameron is trying to edge the UK closer to military action.
Wednesday’s Swiss data is the primary reason for the Pound’s 5-day high advancement against the Swiss Franc. The UBS Consumption Indicator declined from 1.67 The Consumption Indicator moves with changes in real consumer spending and can be used as a gauge of the strength of domestic demand.
Mathew Olney, writing for Future Currency Forecast, explains another reason for the Swiss Franc downtrend; ‘Also weighing upon the Franc was the Swiss Central Bank’s pledge to maintain the Euro/Swiss Franc target floor at 1.20. With the Euro continuing to fall because of disappointing economic data releases the Franc is being dragged lower as well’.
Forecast for the Pound to Swiss Franc Exchange Rate
With nothing for the remainder of the week in terms of Swiss data the Swiss Franc is likely to continue on its current downtrend. Mounting geopolitical issues could see the Franc boosted for its safe-haven qualities.
Thursday will be significant for those invested in the Pound as Bank of England Governor Mark Carney will be making a speech in Wales. Sterling backers will be hoping for a hawkish overtone in order for the Pound to rebound from its current bearish behaviour.
The Pound Sterling to Swiss Franc exchange rate has reached a high today of 1.5458.
The British Pound to Swiss Franc exchange rate extended Wednesday’s gains amid a dearth of economic reports for Switzerland.
However, if today’s UK Reported Sales and Average Earnings figures fall flat, the GBP/CHF exchange rate may reverse its advance.
That being said, investors will also be waiting for Bank of England Governor Mark Carney’s speech in Wales.