Pound to Swiss Franc Exchange Rate (GBP/CHF) Climbs amid Political Speculation for UK General Election

April 28, 2015 - Written by Tim Boyer

STORY LINK Pound to Swiss Franc Exchange Rate (GBP/CHF) Climbs amid Political Speculation for UK General Election

GBP/CHF Gains as Investors Shrug off UK GDP

The Pound advanced against the Swiss Franc as the UK currency made a recovery from weaker-than-expected Gross Domestic Product figures that emerged earlier in the session. The UK economy was expected to see a decline from 3.0% to 2.6% in GDP data; however, the actual ecostat slipped lower to 2.4%. Furthermore, the figure is disappointing for the Conservative government so close to the UK general election on May 7th. The ecostat was fresh bait for the Labour party who jumped on the weak growth number as a way to lure voters. It’s expected in coming weeks politicians will be commenting on much of the UK’s economic progress and could cause the Pound’s exchange rate to fluctuate.

Liberal Democrat chief secretary to the Treasury Danny Alexander stated: ‘The British economy is recovering well, but these figures remind us that there is still work to do to secure the recovery. Though volatile construction data shows a big dip, the underlying figures show that we are still making solid progress across the wider economy.’

Previous comments regarding the outcome of the UK general election have pressured the Pound considerably lower as investors contemplate the possibility of a hung parliament and no outright leader. It’s expected that if the conservatives remain in power the fallout of the election is likely to be less and the Pound may have more stability.

Swiss Data in Short Supply

Alexander continued: ‘Britain will continue to grow at a healthy rate if we stick to a sensible, balanced, timely plan to finish the job and do it fairly. The Tory plans to lurch off to the right with unnecessarily deep cuts and a frenzy of unfunded tax giveaways is a real threat to all the hard earned progress we’ve made to date. Labour’s plans for more borrowing and more debt will push the recovery off track.’

Meanwhile, the Swiss economy experienced a quiet start to the week with little domestic data released. However, Wednesday could heat up Franc exchange rate movement with the release of the UBS Consumption Indicator. However, there are other factors weighing on the Franc at the moment such as speculation that the Swiss National Bank (SNB) may be interfering with the currency market.

The SNB has been accused of buying Euros to weaken the Franc as the amount of funds Swiss commercial banks hold jumped this week. Swiss Sight Deposits jumped to 385.9 billion Francs in the week through April 24th.

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