Credit Agricole Swiss Franc Forex Outlook Today: GBP/CHF Advances as Safe-Haven Franc Demand Eases

June 23, 2015 - Written by John Cameron

STORY LINK Credit Agricole Swiss Franc Forex Outlook Today: GBP/CHF Advances as Safe-Haven Franc Demand Eases

GBP to CHF Exchange Rate Trends at 1.4672 Ahead of UK Data

Early in the European session the Pound Sterling to Swiss Franc exchange rate posted a modest -0.15% decline as the situation in Greece spurred demand for safe-haven assets. The pairing could experience a little movement later today in response to the UK's BBA Loans for House Purchase report. Should the data show the improvement predicted, the Pound could edge slightly higher.

Earlier...

Pound Sterling to Swiss Franc GBP/CHF Exchange Rate Gains, EUR/CHF Cap Removal Still Causing Movement

The Pound managed to climb significantly against the Swiss Franc as the safe-haven appeal of the Franc receded. Monday had seen the Franc remain relatively buoyant and has been ever since the Swiss National Bank removed the cap between the Euro and the Franc on January 15th. Even now on a trade weighted basis the CHF is trading 12% higher than at the beginning of the year. Despite Switzerland housing the lowest interest rates in the world at -0.75%, the Franc still remains a strong currency.

JP Morgan representative Roger Hallam commented: ‘There is a time dependency here—can it [the currency’s depreciation] happen fast enough?’

Forex News Today: CHF Exchange Rate Strength Appealing to EU Migrants, EUR Softer

However, it appears as if the stronger Franc is luring workers from the EU into Switzerland and a rise in foreign commuters. Over a quarter of Switzerland’s work force is made up of commuters and Switzerland has been attempting to keep the number of immigrants down.

The State Secretariat for Economics stated: ‘With the Swiss Franc’s appreciation against the Euro, the incentive for people in neighbouring countries to get jobs in Switzerland has risen. Despite the overall satisfactory development on labour markets, it cannot be excluded that competition for local residents from foreign workers has increased in some regions and labour market segments.’

Pound Sterling (GBP) Exchange Rate Steady against AUD, NZD, CHF in Quiet UK Data Week, Trends Orders Dip

Meanwhile the Pound is having an extremely muted week by way of UK domestic data. Moreover, the release of weaker-than-forecast CBI Trends Total Orders data failed to move the GBP exchange rate significantly, or even marginally. The Pound remained relatively unchanged after the ecostat fell from -5 to -7.

Credit Agricole Swiss Franc Outlook Today

There are several high influence events due to take place this week for CHF, such as Wednesday’s UBS Consumption Indicator and SNB Quarterly Bulletin release. Additionally, SNB Chairman Thomas Jordan will speak on Thursday and could cause a great deal of CHF movement. It’s in the bank’s best interests to keep the Franc softer and therefore any dovish comments may be able to pressure CHF/GBP lower.

Credit Agricole stated: ‘While the SNB left their negative policy rate settings unchanged at -0.75%, a further slowing in Switzerland’s broad money seems a certainty in the week ahead. Posting a 1.4% YoY gain in April, M3 growth appears on-target to return to 2007 levels given its current trajectory – not exactly positive news.’

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TAGS: Euro Forecasts Euro Pound Forecasts Pound Swiss Franc Forecasts