Pound to Swiss Franc Rate Today: GBP/CHF Exchange Rate Dips as UK Data Disappoints

January 6, 2015 - Written by Frank Davies

STORY LINK Pound to Swiss Franc Rate Today: GBP/CHF Exchange Rate Dips as UK Data Disappoints

The Pound slid against the Swiss Franc on Tuesday as weak UK data and safe-haven demand spurred Swiss Franc growth. The Swiss National Bank (SNB) recently stated that the cap for the ‘Swissie’ against the Euro is imperative and will be protected at all costs.

Pound to Swiss Franc Exchange Rate Today

SNB Chief Thomas Jordan stated: ‘We do have very low inflation and are forecasting negative inflation for 2015, which is why the cap is absolutely central.’ However, global politics are uncertain and with an upcoming UK general election, deflation threats in the Eurozone and fears of a worldwide slowdown taking place, the Swiss Franc has become a popular asset.

One event that could have a massive impact on other major currencies would be the exit of Greece from the Eurozone. The German government has boldly stated that it believes the Eurozone could survive the departure of Greece, a view that not all economists have shared. Jordan stated: ‘We don’t think this will happen and it’s not in our base scenario, but we shouldn’t underestimate the risk, should it come to an exit, that this would have, not only for the Eurozone but also for Greece itself.’

Friday will see the release of Swiss Inflation Rate figures. The CPI data could affect the Swiss Franc. At present, expectations are for a further decline in annual inflation from -0.10% to -0.14%. Meanwhile, Thursday could be an interesting day for Pound trading with the release of the most recent Bank of England (BoE) interest rate decision. The central bank has seen a split interest rate vote in the last four meetings, with two hawkish members voting in favour of immediate interest rate hikes. Friday could also offer some significant Pound movement when UK Industrial Production, Manufacturing Production, and Trade Balance stats surface. With both annual Industrial and Manufacturing Production figures expected to expand quite significantly, Sterling could rally.

The beginning of the week saw disappointment for the UK when Markit’s Construction Purchasing Managers Index (PMI) slumped from 59.4 to 57.6 in December—a 17-month low. Markit economist Tim Moore stated: ‘While new business growth moderated to its lowest for a year-and-a-half in December, UK construction firms are still highly upbeat about their prospects for output growth in 2015.’

However, the disappointment continued on Tuesday when UK Services PMI also declined, residing at 55.8 from 58.6. Industry expert David Noble stated: ‘Though the index reports a slowdown this month, the recent wave of optimism has not abated amongst the panel’s respondents, half of whom believe 2015 will still be a good year.’

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