Pound to Swiss Franc (GBP/CHF) Exchange Rate Firm after Upbeat Swiss PMI
The British Pound (GBP) was trading up against the Swiss Franc (CHF) on Monday, rising to session highs of 1.5263, versus lows of 1.5227.
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Switzerland published their Procure Ch. Purchasing Managers Index on Monday, which proved highly favourable, bypassing economists’ predictions of 53.1—instead rising to 54.3 in July, showing manufacturing activity proved more productive than estimated. This also betters June’s 54 figure; however both show expansion as they reside above the 50 benchmark.
Conversely the Pound is trading amid the hype surrounding UK interest rate hikes. When Governor for the Bank of England, Mark Carney, first commented that interest rate hikes were closer than economists were initially forecasting, the Pound rocketed to popularity in the currency market.
The subsequent attractiveness that engulfed the Pound continued to allow it to trade strongly against other major currencies. As the UK appeared to be the first on target of the developed nations to raise interest rates, Sterling maintained its position as the strongest currency in the market causing fears amongst large businesses such as Burberry that the Pound would damage profits.
However, the US Dollar made its way into the spotlight last week causing the Pound to plummet after the Federal Reserve appeared more hawkish giving confidence that the Fed may raise rates quicker than expected following positive employment data.
Expert in the field Michael Riddell commented: ‘There are risks that the Fed will need to start getting more hawkish.’
With the Federal Reserve appearing more involved with speculation of raising interest rates in the US, the Pound lost some of its shine to investors.
Industry expert Jeremy Stretch commented: ‘Investors have been buying into the Pound aggressively but there has been some fatigue over the past few weeks.’
The UK economy is under debate as to the sustainability of interest rate hikes; however Sterling is expected to fluctuate further following the outcome of Thursday’s Bank of England Rate Decision meeting.
Wednesday will prove influential for the “Swissie” with the publication of Swiss Consumer Price Index figures, whilst Friday will see the more influential Unemployment Rate numbers.
The UK however produced highly favourable Construction PMI figures today which showed that house building in the UK accelerated the most swiftly in 11 years.
At present the GBP to CHF exchange rate looks set to remain relatively stable, although the Pound will be extremely volatile dependent on Thursday’s outcome.