Pound Sterling Exchange Rate Forecast: GBP/EUR, GBP/CHF Advancing; German and Eurozone Inflation/Unemployment Ahead
The Pound Sterling to Euro (GBP/EUR) and Pound Sterling to Swiss Franc (GBP/CHF) exchange rates both recorded gains in Wednesday’s European trading despite upbeat Swiss data.
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The UBS Consumption Indicator, which measures consumer spending in Switzerland, rose in December from 1.29 to 1.42, suggesting domestic demand has increased.
UBS stated: ‘In December, new car registrations climbed 20% compared to the previous month, seasonally adjusted. This is the highest December number since data collection began in 1995. In the past 20 years, there have only been five other months in which reported car sales were higher.’
However UBS warned investors not to get too overexcited, stating: ‘Nevertheless, exuberance about the growth of private consumption would be premature, since higher carbon taxes for new car purchases came into force as of January 2015. It’s likely, therefore, that many of these car purchases were made in advance of this deadline, so weaker car sales can be expected for early 2015.’
Pound Sterling to Euro (GBP/EUR) and Swiss Franc (GBP/CHF) Exchange Rate Forecast
Meanwhile, the Euro has softened ahead of a couple of busy data days. Thursday will see the release of the German Unemployment Rate and Unemployment Change stats. At present, forecasts expect the Unemployment Rate to remain at 6.5% and for Unemployment Change to record a -10K figure.
However, any more favourable data could give the Euro a boost ahead of Eurozone Unemployment Rate ecostats on Friday.
In addition, Germany’s Consumer Price Index (CPI) will be published on Thursday and could be used as an indication for Eurozone inflation stats on Friday.
Eurozone CPI is expected to dip further into deflation territory, from -0.2% to -0.5%. Any additional tumbling could be disastrous for the Euro exchange rate.
Meanwhile, the Swiss KOF Leading Indicator index will also be published on Friday and economists expect the report to show a fall from 98.7 to 94.7. Weaker Swiss data could pressure the Swiss Franc lower against both the Pound (CHF/GBP) and the Euro (CHF/EUR).
UK data will materialise in the form of the GfK Consumer Confidence Survey, Mortgage Approvals, Net Consumer Credit and Net Lending Secured on Dwellings on Friday.
Any upbeat UK figures could boost the Pound amid a backdrop of aggressive UK politics in the run up to the general election.
The Pound Sterling to Euro (GBP/EUR) exchange rate is presently residing at 1.3393. The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate is trending in the region of 1.3721. The Euro to Swiss Franc (EUR/CHF) exchange rate hovers at 1.0245.