Pound Sterling to Swiss Franc (GBP/CHF) Exchange Rate Forecast: Swiss Deflation Fails to Dent Franc Today
Hopes for a Pound (GBP) rally were disappointed on Friday as the UK Visible Trade Balance failed to narrow as far as forecast, while the Franc (CHF) largely shrugged off a discouraging CPI result.
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Osborne Highlighted Downside Risks to Push GBP/CHF Exchange Rate to Eight-Month Low
Pronounced market volatility helped to push the Pound Sterling to Swiss Franc (GBP/CHF) exchange rate to an eight-month low of 1.4508 on Thursday, as investors piled into safe-haven assets after the Shanghai Composite Index was automatically shut down after just twenty-nine minutes. Suggestions of a more severe slowdown within the Chinese economy naturally drove up the appeal of the Franc (CHF) throughout the day.
Chancellor of the Exchequer George Osborne weakened the Pound (GBP) with comments highlighting the downside risks or ‘cocktail of threat’ that could potentially derail the continued recovery of the UK economy in the coming year. As this ran rather counter to the more optimistic nature of Osborne’s Autumn Statement the outlook of the domestic economy was dented, leaving traders little incentive to buy into Sterling.
Disappointing UK Visible Trade Balance Denies Pound (GBP) Rally Today, Franc (CHF) Climbs despite Weak CPI
Although the latest UK Visible Trade Balance demonstrated a narrowing of the nation’s trade deficit sentiment towards the Pound has remained bearish ahead of the weekend. This was due to pundits having anticipated a greater narrowing to -10.5 billion rather than -10.6 billion Pounds. Putting no particular pressure on the Bank of England (BoE) to begin raising interest rates sooner rather than latter, this somewhat disappointing data failed to shore up the GBP/CHF exchange rate.
While stock market turmoil was more limited on Friday thanks to the suspension of the Chinese circuit breaker system the Franc has remained relatively buoyant. December’s Consumer Price Index did not offer particular encouragement to the currency, however, as Swiss inflation failed to improve as far as forecast to print at -1.3% rather than -1.2%. Nevertheless, the softness of the Pound left it unable to capitalise on this weaker data today.
GBP/CHF Exchange Rate Forecast: Pound Sterling Predicted to Soften as UK Manufacturing Production Falters
Swiss Retail Sales may offer fresh support for the Franc on Monday, with traders anticipating a return to positive growth on the year in November. Any suggestions of stronger economic conditions would help to keep the currency on an uptrend against rivals, easing concerns over the impact of negative global headwinds on the domestic economy.
Later in the week UK Manufacturing and Industrial Production figures along with the NIESR GDP estimate could supply the Pound with a rallying point, although weaker results may push the GBP/CHF exchange rate further back into the region of multi-month lows.
Current GBP, CHF Exchange Rates
At the time of writing, the Pound Sterling to Swiss Franc (GBP/CHF) exchange rate was slumped in the region of 1.4492, while the Swiss Franc to Pound Sterling (CHF/GBP) pairing was making gains around 0.6895.