Pound to Swiss Franc (GBP/CHF) Exchange Rate Stable ahead of Swiss GDP Growth Figures

December 2, 2014 - Written by Ben Hughes

STORY LINK Pound to Swiss Franc (GBP/CHF) Exchange Rate Stable ahead of Swiss GDP Growth Figures

The Pound has been trading within a narrow range versus the Swiss Franc after UK figures disappointed.

Furthermore, the ‘Swissie’ is likely to be bearish in nature ahead of Switzerland’s upcoming Gross Domestic Product (GDP) Growth Rate figures, which have been forecast to contract in the third quarter.

The ‘Save Our Swiss Gold’ initiative got voted down last week, causing the price of gold to drop. The referendum offered citizens the opportunity to force the Swiss National Bank (SNB) to hold 20% of its reserves in gold, rather than the preferred mode of foreign exchange. However, the ‘No’ vote win vote allows for smoother relations with the EU.

Economics Professor Reto Foellmi commented: ‘The result of both today’s gold and immigration referenda show that the Swiss public want to pursue a coherent international economic policy and do not want to create new tensions with their EU neighbours.’

CHF Rates Today

The Pound to Swiss Franc exchange rate is +0.17 pct higher with a conversion rate of 1 GBP equals 1.52041 CHF.
The Euro to Swiss Franc exchange rate today is converting +0.09 per cent higher at 1.20409 EUR/CHF.
The US Dollar to Swiss Franc exchange rate is +0.79 pct higher with a conversion rate of 1 USD equals 0.97229 CHF.
The Canadian Dollar to Swiss Franc exchange rate converts at 1 CAD is 0.85210 CHF.
The Hong Kong Dollar to Swiss Franc exchange rate converts +0.8 per cent higher at 1 HKD is 0.12538 CHF.

However, recent Swiss manufacturing figures indicated that the sector is expanding at a slower pace towards the end of the year. The Manufacturing Purchasing Managers Index (PMI) fell from 55.3 to 52.1 in November. The PMI report author’s stated: ‘Although the recovery of the industrial economy seems to have lost momentum slightly, it nevertheless held up.’

Meanwhile, Markit’s UK Construction Purchasing Managers Index fell in November from 61.4 to 59.4. The report read: ‘UK construction companies indicated a strong expansion of business activity in November, but the overall pace of growth moderated for the second month running to its least marked since October 2013. Nonetheless, the headline index has now posted above the neutral 50.0 threshold for 19 months running and the latest reading was stronger than the long-run survey average.’

Wednesday will see the release of Markit’s UK Composite and Services PMI as well as Official Reserves figures. Meanwhile, Thursday could see Pound movement when the Bank of England (BoE) announces its interest rate decision. Although any alteration to the current 0.50% cash rate is highly unlikely, the event has seen significant Sterling fluctuations in the past. In addition, BoE’s Andrew Gracie is scheduled to speak in London in the second half of Thursday’s session, which could be another factor to affect the currency.

Pound Forecast

Friday will keep the Pound under pressure with the release of the BoE/GFK 12-Month Inflation report. The Bank of England recently stated that it believed the UK economy could see a fall in consumer prices to below 1.0% in the near future—an event that would offer little support to the Pound. However, any hawkish remarks by the central bank could bolster the Pound, whereas any dovish tones could see it fall.

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