FX News Now: British Pound to Swiss Franc (GBP/CHF) Exchange Rate Forecast to Rally after SNB Intervene to Combat Overvaluation

June 30, 2015 - Written by Toni Johnson

STORY LINK FX News Now: British Pound to Swiss Franc (GBP/CHF) Exchange Rate Forecast to Rally after SNB Intervene to Combat Overvaluation

UK Manufacturing PMI Forecast to Trigger GBP to CHF, GBP to USD Exchange Rate Movement Today

This morning's UK manufacturing report is expected to show a modest uptick in output in June. If that proves to be the case it would be the latest in a string of ecostats revealing a brighter UK economic outlook. However, a disappointing reading would weigh on Sterling and could see it slide against the Euro, US Dollar and Swiss Franc.

Earlier...

BoE Interest Rate Remarks Impact GBP/CHF, GBP/EUR, GBP/USD Exchange Rate Movement

The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate climbed by around 0.60% on Tuesday afternoon.

Having depreciated considerably in response to dovish comments from the Bank of England’s (BoE) Chief Economist, the Pound recovered some of its losses on Tuesday. This is due to better-than-expected domestic data.

The Swiss Franc, meanwhile, dived versus its peers after Swiss National Bank (SNB) President Thomas Jordan announced that the central bank intervened in the markets as a result of the Greek crisis causing high demand for the ‘Swissie’ (CHF).

The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate is currently trending in the region of 1.4649.

Pound Sterling (GBP) Exchange Rate Forecast to Hit Best Rate of 1.47 against the Swiss Franc (CHF) on UK First-Quarter Growth

As explained above, the Pound dived on Monday after the close of the European Session in response to BoE official Andy Haldane’s comments. Haldane warned against an early rate hike as the scars from the most recent recession are still deep. He also stated that he believes the possibility of a benchmark rate hike is equal to that of a cut in the current climate of global economic uncertainty.

The Pound rebounded on Tuesday, however, thanks to better-than-expected domestic data. June’s GfK Consumer Confidence bettered the market consensus of a rise from 1 to 2, with the actual result showing confidence jumped to 7. The spike in consumer confidence is likely the result of accelerated wage growth in conjunction with record-low interest rates. In addition, the final figure for first-quarter annual growth was upwardly revised from 2.4% to 2.9%.

The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate dropped to a low of 1.4559 today.

Swiss Franc (CHF) Exchange Rate Forecast to Dive against the British Pound (GBP) as Greek Crisis Continues

The crisis in Greece is bad news for the SNB .With uncertainties mounting regarding the fallout of a Greek exit, which some forecasters have given an 85% chance of happening, has caused market sentiment to dampen considerably. This caused heightened demand for safe-haven assets and so the Franc appreciated significantly. Since the removal of its Euro cap, the SNB has struggled against Franc overvaluation. The increased demand for the Franc was countered over night when the central bank opted to intervene in the market in order to devalue the asset.

‘Correlation between Greek risk and EUR/CHF has risen again recently, and CHF’s safe-haven status remains intact, in our view. Thus, the SNB intervention comes as no surprise, after the surprising development of the Greek situation over the weekend, to avoid further appreciation of CHF against EUR and other currencies. At the same time, President Jordan’s comments were the clearest message since the removal of the floor that the SNB has actually intervened in the market, rather than just suggesting a possibility. Thus, we judge that the SNB’s concerns over CHF appreciation are now greater than over the past few months,’ stated Global FX Strategists at Nomura.

Pound Sterling to Swiss Franc (GBP/CHF) Exchange Rate Forecast to Hold Gains ahead of Greek Referendum

Given that damp trader risk appetite and uncertainties regarding Greece’s future in the Eurozone is causing the Franc to appreciate, there is a very high likelihood that the SNB will intervene once again. Therefore, the Pound Sterling to Swiss Franc (GBP/CHF) exchange rate is likely to hold gains ahead of the result from the Greek referendum which some analysts have termed ‘Greferndum.’

The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate climbed to a high of 1.4679 today.

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: Currency Predictions Pound Sterling Forecasts Pound Swiss Forecasts