Pound Sterling to Swiss Franc Exchange Rate (GBP/CHF) Edges Off 2-Year high

September 30, 2014 - Written by James Fuller

STORY LINK Pound Sterling to Swiss Franc Exchange Rate (GBP/CHF) Edges Off 2-Year high

The British Pound to swiss Franc exchange rate (GBP CHF) advanced to its best level in 2-years on Tuesday after data out of the UK showed that the nation’s economy expanded at a faster rate than previously thought in the second quarter of the year.

The Swiss Franc meanwhile weakened after the latest KOF leading economic indicator report fell more than expected in September. The currency also fell alongside the declining Euro after data showed that the 18-member currency bloc saw consumer prices fall yet again to 0.3%. The drop, increased concerns that deflation will soon take root in the region and affected the Franc, as the Eurozone is Switzerland’s largest trading partner.

The latest CHF rates today:

The Swiss Franc to Australian Dollar exchange rate is trading down -0.77% at 1.19746 CHF/AUD.
The Swiss Franc to Canadian Dollar exchange rate is trading up +0.01% at 1.17349 CHF/CAD.
The Swiss Franc to Euro exchange rate is trading up +0.08% at 0.82923 CHF/EUR.
The Swiss Franc to Pound exchange rate is trading down -0.21% at 0.64605 CHF/GBP.
The Swiss Franc to New Zealand Dollar exchange rate is trading down -0.92% at 1.34311 CHF/NZD.
The Swiss Franc to US Dollar exchange rate is trading down -0.42% at 1.04705 CHF/USD.

The KOF leading economic indicator fell by 0.5 points to a total of 99.1 this month, a drop from the previous figure of 99.6 seen in the preceding month. The report is designed to show how the Swiss economy will fair over the coming six months.

Economists surveyed by the KOF economic institute trimmed their forecast for Swiss growth this year to 1.8%, from 2.1%, due to weaker exports and lower investments in the construction industry. Growth is likely to pick up marginally next year to 1.9%, but is below their previous forecast of 2.2%, KOF said earlier this month.

With the Eurozone experiencing weakness at levels not seen since the financial crisis the Swiss economy will be negatively affected as most of its exports are sent to Euro nations. Factory activity expanded at a slower pace in August as order books shrank, while exports fell in August for the first time since May as demand from the rest of Europe weakened.

The Pound meanwhile advanced sharply against the Euro and Swiss Franc after investors widely ignored softer than expected data releases and focused on the GDP growth report.

The report showed that the UK economy grew faster and strengthened in size more than previously thought in the second quarter of the year, the data showed that the UK had recovered faster than thought.

‘The new data shows that during the recent downturn the economy shrank by 6.0%, rather than the 7.2% previously estimated. GDP was also estimated to have exceeded its pre-financial crisis levels in Q3 2013, three quarters sooner than previously estimated. However, overall, the average absolute quarter-on-quarter revision between 1997 and 2014 Q2 was 0.16 percentage points,’ said the ONS.

The Franc could recover some ground on Wednesday if the latest Swiss Manufacturing PMI data comes in strongly. A decline however would likely send it lower.

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