Pound to Swiss Franc (GBP/CHF) Exchange Rate Relatively Static Following Data Disappointments

May 5, 2015 - Written by David Woodsmith

STORY LINK Pound to Swiss Franc (GBP/CHF) Exchange Rate Relatively Static Following Data Disappointments

GBP/CHF Holding Steady Despite UK Construction PMI Dip

The Pound remained in a tight range against the Franc on Monday after both UK and Swiss data emerged at the start of the week. The UK construction sector was less productive than initially thought with the April gauge coming in at 54.2 from the previous month’s 57.8. However, the slowdown is thought to be a result of the upcoming general election which has always been likely to hinder certain areas of economic growth.

Industry expert Tim Moore commented: ‘The uncertain general election outcome appears to have put some grit in the wheels of decision making. Construction firms widely noted delays with client’s budget setting and a reduced propensity to commit to new projects. Despite experiencing pre-election risk aversion in April, construction companies indicated a strong degree of confidence regarding the year-ahead outlook. As a result, job hiring was robust and little-changed since March, placing further pressure on skilled staff availability.’

The Thursday election could cause the Pound to plummet as investors’ price in the possibility of a hung parliament or political shakeup. At present, it appears as if an outright win is an extremely slim possibility, leaving the door open for a coalition of some kind to take power.

UK Election to Drive Pound Sterling Movement

Liberal Democrat Nick Clegg stated: ‘Everybody knows that no one will win this election – even if David Cameron and Ed Miliband won’t admit it publically. That means politicians will have to work together to put the country first.’

As polls remain close it appears that Thursday could yield an extremely tight and interesting election result. Meanwhile, Monday offered the Swiss Franc little support when the SVME Manufacturing Purchasing Managers Index stagnated in April, rather than climbing higher as expected. The gauge remained at 47.9 rather than rising to 48.2— recording the fourth month of contraction for the nation. Any ecostat below the 50.0 benchmark indicates contraction, while above denotes growth. Since the Swiss National Bank made the announcement that it was removing the tie between the Euro and the Franc, the Swiss currency has jumped higher causing problems for many businesses in the nation. The end of the week could be more influential for the Franc with consumer sentiment and Foreign Currency Reserve numbers out on Thursday. Friday will finish the week with labour market data as well as inflation numbers which could cause major Franc movement in the market.

Swiss central bankers are also due to speak toward the end of the week which could cause market movement.

Wednesday’s UK services data could cause some moderate Pound movement.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Daily Currency Updates Pound Sterling Forecasts Pound Swis Forecasts