Pound to Swiss Franc Exchange Rate Today: GBP CHF Edges Higher on Below Forecast KOF Indicators

July 29, 2014 - Written by Ben Hughes

STORY LINK Pound to Swiss Franc Exchange Rate Today: GBP CHF Edges Higher on Below Forecast KOF Indicators

The Pound to Swiss Franc exchange rate was little moved on Tuesday as the market saw cautious trading ahead of key economic data releases later in the week and as number of conflicts raised geopolitical concerns. The current GBP CHF exchange rate is 1.53778, just 0.06 per cent higher on the day's open (revised 30/07/2014 19:00 GMT)

The UK currency experienced little movement following the release of the latest UK mortgage lending and consumer credit reports. The Pound inched lower after data released by the Bank of England showed that net lending to individuals and households increased less than expected in June. That report was countered by a separate report which showed that the number of mortgages approved by banks increased more than forecast in June.

In its report, the Bank of England said that total net lending to individuals rose by £2.5 billion in June; the figure was below expectations for a rise of £2.6 billion and was below the previous month’s figure of £3 billion. The figures reflect a weakening demand for credit.

The report also showed that Net secured lending increased by £2.1 billion last month, beating forecasts for a figure of £1.9 billion but was below May’s figure o £2.3 billion. Net consumer credit, including things such as overdrafts, credit card lending and loans increased by £0.42 billion, down from the £0.72 billion in May.

The report also showed that the number of final mortgage approvals rose to 67,000 in June from 62,000 in May. Economists had expected mortgage approvals to increase to 63,000.

Following the release of the data, the pound held on to modest losses against the U.S. dollar, with GBP/USD shedding 0.03% to trade at 1.6979.

The Swiss Franc meanwhile came under pressure as signs emerged that the recent price hikes in the Swiss property market is starting to ease as the Swiss Central Bank and other banks begin to tighten up lending rules. The Swiss government has welcomed tighter lending rules, and said that whilst the pace of real estate price increases is slowing, the gains are still outweighing earnings growth.

The SNB and the government are worried that many borrowers won't be able to afford higher mortgage repayments when interest rates rise, leading to repossessions and a sharp drop in property prices. This in turn could threaten the stability of the Alpine nations banking system,

"It looks as if the Swiss real-estate market is slowly cooling down following these measures, but probably not as fast as the Swiss central bank would hope for," said Julien Manceaux, an economist with ING.

The Franc could experience volatility on Wednesday if the latest business confidence out of the nation decreased in July. Last month’s figure was 0.4, and economists expect an improvement to 1.0.

GBP/CHF Update 30/07/2014

The Swiss Franc weakened against the Pound Sterling and was mixed against other major peers on Wednesday after Switzerland’s leading economic barometer dropped unexpectedly this month.

The report suggests that the Alpine nation’s economy is losing some of its momentum as the Eurozone remains weak. According to KOF its index of economic indicators fell more than forecast.

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