Swiss Franc Exchange Rates: GBP Falls vs CHF after Swiss Unemployment Holds Steady

December 9, 2014 - Written by Frank Davies

STORY LINK Swiss Franc Exchange Rates: GBP Falls vs CHF after Swiss Unemployment Holds Steady

Currency News UK - Pound Sterling Falls versus Swiss Franc (GBP/CHF) Exchange rate after Swiss Unemployment Holds Steady

The Pound sank against the Swiss Franc after Swiss unemployment levels stagnated rather than expanded as economists had expected. The seasonally adjusted November figure remained at 3.1% instead of rising to 3.2%.

Meanwhile, tensions are high between the Swiss National Bank (SNB) and European Central Bank (ECB) President Mario Draghi.

The SNB have vowed to protect the Swiss Franc’s 1.20 cap against the Euro; however, the central bank may now have to introduce negative rates if quantitative easing (QE) measures come into play in the early part of next year, as some economists have forecast.

Economist Jordan Rochester stated: ‘The SNB are in a trade off here. [It’s] between a proactive decision of cutting rates before ECB action or kicking the can further down the road and saving ammunition in case they need to relieve pressure on the floor if the ECB does commence quantitative easing.’

The Swiss Franc to Australian Dollar conversion rate is +0.01 pct higher at 1.24186 CHF/AUD.
The Swiss Franc to Euro conversion rate is 0.83175 CHF/EUR.
The Swiss Franc to Pound exchange rate converts at 1 CHF is 0.65687 GBP.
The Swiss Franc to New Zealand Dollar exchange rate today is converting -0.03 per cent lower at 1.33911 CHF/NZD.
The Swiss Franc to US Dollar exchange rate today is converting +0.01 per cent higher at 1.03040 CHF/USD.

Euro Zone Weakness Contibuted to UK Slowdown

Last week saw Draghi suggest that the central bank would be re-evaluating its stimulus measures in the early part of 2015, with the possibility of implementing further monetary policy if needed.

The central bank has come under fire for not using more aggressive action sooner as the Eurozone economy struggles to grow.

The weakness in the Eurozone has also contributed to a slowdown in the UK which has seen the Bank of England (BoE) adopt a dovish tone on the topic of interest rate hikes.

At present, any additional dovish statements from the central bank could pressure the currency lower.

UK Data Falls

Tuesday saw UK Manufacturing Production fall in November on the year from 2.2% to 1.7%.

The surprise figure defied economists’ forecasts of a jump to 3.2%. Economist Howard Archer stated: ‘Weak Eurozone activity is clearly having a limiting impact on foreign demand.’

The UK’s recovery has slowed in recent months, which has seen some businesses struggle. Tesco has announced that company profit has fallen significantly due to the retail giant being priced out of the market by cheap European stores such as Aldi and Lidl.

Swiss Franc Exchange rate Forecast

UK NIESR Gross Domestic Product figures are scheduled for release later in Tuesday’s session, which may cause some Pound movement against other majors.

Meanwhile, the Swiss Franc will experience an interesting day on Thursday when the SNB announces its latest rate decision. Interest rates are expected to remain at 0.00%.

The European Central Bank (ECB) is also scheduled to publish its Monthly Report, which could also alter Swiss Franc trading. UK data will be fairly limited on Thursday with only the RICS House Price Balance figures out for release.

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