GBP to CHF and EUR Exchange Rate Forecast – BoE Minutes and Scottish Referendum Ahead
On Friday the British Pound to Swiss Franc exchange rate declined ever-so-slightly as the UK’s Construction Output report disappointed expectations. The British Pound to Euro exchange rate was little-changed as positive economic data for the Eurozone counteracted the positive impact of the latest YouGov poll on the subject of Scottish independence.
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On Thursday the Swiss Franc posted its most considerable decline against the Euro for six months and softened against the US Dollar as a result of concerns that the Swiss National Bank intends to introduce negative interest rates. According to an article published by the Wall Street Journal, SNB official Thomas Moser has commented that the central bank considers introducing negative interest rates a possibility.
The SNB later issued the following statement; ‘The Swiss National Bank has always emphasised that it would take further measures to enforce the cap if necessary, and SNB chairman Thomas Jordan has mentioned negative interest rates several times in interviews as an example in this context.’
However, while the Franc is holding declines against the Euro, the GBP/CHF exchange rate has shed over 0.25% as the UK’s Construction Output report fell short of forecasts and the Scottish referendum debate piled pressure on the Pound.
On Friday the Pound to Euro exchange rate drifted lower as the day’s economic data for the Eurozone impressed. Industrial production in the 18-nation currency bloc was shown to have risen by 1% on a month-on-month basis rather than the 0.7% expected. On the year, industrial production was consequently up 2.2% rather than the 1.4% anticipated. This data was published at the same time as the Eurozone’s quarterly inflation report.
On a quarter-on-quarter basis, employment in the currency bloc climbed by 0.2% in the second quarter, not much of an improvement on the 0.1% gain registered in the first quarter. Annually, employment was 0.4% higher.
Meanwhile, the UK’s construction output report disappointed expectations, showing unexpected stagnation in July. The Pound was also feeling the pressure as industry experts speculated that the currency could lose an additional 10% if Scotland opts out of the UK and the Euro was accordingly able to achieve the upper hand in the Pound to Euro exchange rate.
GBP/CHF Exchange Rate Forecast
There are several Swiss economic reports to be aware of next week, including the nation’s Producer Price Index and Balance of Trade figures. Movement in the Pound to Swiss Franc (GBP/CHF) exchange rate is also likely to be inspired by the Swiss National Bank’s interest rate decision. Any surprising developments may trigger volatility. Of course the week’s big UK news – the Scottish referendum – may also be responsible for the direction taken by the GBP/CHF exchange rate next week.
GBP/EUR Exchange Rate Forecast
Of the flood of data releases due for publication next week, those from the Eurozone with the most potential to cause GBP/EUR exchange rate movement include; ZEW economic sentiment surveys for the Eurozone and its largest economy, the Eurozone’s Consumer Price Index for August, Eurozone Construction Output figures and Germany’s Producer Price Index.
If the Eurozone’s reports disappoint, adding to the case in favour of the European Central Bank unleashing quantitative easing in the near future, the GBP/EUR exchange rate could rally over the course of the week. However, if the BoE minutes show that the two members of the Monetary Policy Committee who voted in favour of hiking interest rates at the August gathering retracted their votes in September the Pound could come under pressure. Additionally, a ‘Yes’ vote for Scottish independence on Thursday would no doubt cause extensive Sterling losses.
Currently the Euro is trading against the Pound in the region of 0.7962 and is trading against the US Dollar in the region of 1.2932