Pound to Swiss Franc Exchange Rate Today - GBP/CHF Softer on borrowing data and safe haven demand

September 23, 2014 - Written by James Fuller

STORY LINK Pound to Swiss Franc Exchange Rate Today - GBP/CHF Softer on borrowing data and safe haven demand

The UK Pound to Swiss Franc exchange rate (GBP/CHF) slipped on Tuesday afternoon as concerns over the health of the Eurozone economy, the widening conflict against the Islamic State and a report showing that UK borrowing increased sharply weighed.

Economic data out of the 18-member single currency region showed a further decline in manufacturing and service sector production, raising concerns that the UK economy will experience a drop in exports. The Swiss Franc too was softened by the data, as the Eurozone is the Alpine nation’s largest trading partner.

The Swiss Franc to Australian Dollar exchange rate is trading up +0.73% at 1.20193 CHF/AUD.
The Swiss Franc to Canadian Dollar exchange rate is trading up +0.1% at 1.17216 CHF/CAD.
The Swiss Franc to Euro exchange rate is trading up +0.14% at 0.82846 CHF/EUR.
The Swiss Franc to Pound Sterling exchange rate is trading down -0.03% at 0.64734 CHF/GBP.
The Swiss Franc to New Zealand Dollar exchange rate is trading up +1.58% at 1.33211 CHF/NZD.
The Swiss Franc to US Dollar exchange rate is trading down -0.08% at 1.05623 CHF/USD.

Granting support to the safe haven Franc was news that the United States and a number of Arab allies have launched an offensive against the Jihadist Islamic State.

The attacks involved a variety of aircraft and saw them bomb a number of targets across Iraq and in an escalation Syria. With the battlefield, widening more allies could join in the offensive. Some observers believe it to be just a matter of time before the UK joins in with launching airstrikes.

‘The escalation of the conflict will of course raise questions over the risk appetite of many within the markets, who are no doubt worried about a major war which appears to be unfolding,’ said Joshua Mahoney, a research analyst from Alpari.

The Eurozone data meanwhile triggered off a selloff of the Euro and prompted investors to turn to safer assets such as the Swiss Franc.

Data compiled by Markit Economics showed that the regions composite Purchasing Managers Index (PMI) fell to its lowest level in nine-months suggesting that business activity right across the Eurozone is weakening. Earlier in the session, the Euro was maintaining gains from comments made on Monday by European Central Bank Governor Mario Draghi.

‘The Eurozone data are likely to put further pressure on the European Central Bank to come up with fresh stimulus measures to prop up the flagging recovery. ECB President Mario Draghi signalled Monday that the central bank remains open to a program of quantitative easing if inflation stays too low. If there is, too much bad news the prospect of more from the ECB is not enough to hold up markets. We already had a lot of QE optimism in the price,’ said Christian Stocker, an equity analyst at UniCredit.

The Swiss Franc could make further gains on Wednesday if the latest UBS Consumption Indicator report comes in positively.

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