Swiss Franc Exchange Rate Today: GBP CHF Recoups Losses Over 5 Year Low UK Inflation Data

Modified: Thursday, 16 October 2014 21:56 BST - Written by Frank Davies

STORY LINK Swiss Franc Exchange Rate Today: GBP CHF Recoups Losses Over 5 Year Low UK Inflation Data

The British Pound to Swiss Franc rate (GBP/CHF) softened on Tuesday following a shock dive in UK inflation.

The Consumer Price Index (CPI) was forecast to dip from 1.5% to 1.4% in September.

However, the actual figure came in at a highly unfavourable 1.2% - a five-year low.

Investors have shied away from the Pound Sterling (GBP) as weaker CPI indicates another headwind standing between the Bank of England (BoE) and interest rate hikes.

Latest Swiss Franc exchange rates:

The Pound to Swiss Franc exchange rate today is converting -0.62 per cent lower at 1.51671 GBP/CHF.
The Euro to Swiss Franc exchange rate today is converting -0.12 per cent lower at 1.20721 EUR/CHF.
The US Dollar to Swiss Franc exchange rate converts +0.39 per cent higher at 1 USD is 0.95371 CHF.
The Canadian Dollar to Swiss Franc is -0.41 pct lower with a conversion rate of 1 CAD equals 0.84424 CHF.
The Aus Dollar to Swiss Franc converts -0.1 per cent lower at 1 AUD is 0.83083 CHF.


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Meanwhile, the Swiss Franc has softened against a basket of other majors on Tuesday as the Swiss Producer Price Index (PPI) fell in September.

Figures contracted by -0.1% on the month, slightly less damaging than August’s -0.2% fall.

On a yearly basis, September’s report takes the figure lower to -1.4%.

The slowdown in Swiss PPI will increase deflation fears. Furthermore, the flat-lining Eurozone economic recovery highlights a more substantial fatigue in the region which will also increase downward pressure on the ‘Swissie’.

Swiss National Bank Tries to Quell Deflation Fears

The Swiss National Bank (SNB) announced on Friday that it would introduce whatever measures were necessary to fight the prospect of persistently low inflation in the Swiss economy. SNB Chairman Thomas Jordan stated: ‘At the moment we have this deflation risk, or risk of negative inflation, especially also because the European situation deteriorated recently. It’s something that is really on the radar screen.’

Last week saw Swiss Consumer Price figures fall in September for the first time in seven months. The SNB also recently cut its inflation forecasts for 2015 to 0.2%, and 0.5% for 2016. Jordan continued: ‘There are downward risks especially given lower commodity prices, lower oil prices, and a weaker world economy. Usually these are also signs that risks are to the downside rather than to the upside.’

The possibility of the SNB cutting rates into the negatives to control the Swiss Franc exchange rate (which is tied to the Euro) was recently on the table The SNB enforced a 1.20 cap for the Franc per Euro in an attempt to ward off deflation threats and recession fears. However, with current faltering in the Eurozone a prominent fear for many economists, the Swiss central bank may need to up its game to protect the economy. Jordan commented on the issue of monetary policy saying: ‘We do not exclude any other measure if necessary, including negative interest rates. We will defend the minimum exchange rate with unlimited intervention if necessary and if necessary we are also ready to take immediate action with other instruments.’

Pound to Swiss Franc Exchange Rate Forecast

The ZEW Swiss Survey Expectations report is scheduled for release on Wednesday and SECO Economic Forecasts figures are out on Thursday which may cause movement in the CHF.

Following this, Switzerland will take a break from publishing data until Tuesday 21 October which will see the release of Balance of Trade figures.

Therefore, movement in the GBP CHF will depend heavily on any UK data releases alongside global developments.

The UK will release Average Weekly Earnings, Unemployment Rate, Claimant Count, Employment Change and Jobless Claims Change figures on Wednesday, all of which may help the Pound gain some lost ground if favourable.

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