Pound Gains Against Swiss Franc (GBP/CHF) as Safe-Haven Asset Loses Favour on Bank Speculation

Modified: Tuesday, 10 March 2015 16:21 BST - Written by James Fuller

STORY LINK Pound Gains Against Swiss Franc (GBP/CHF) as Safe-Haven Asset Loses Favour on Bank Speculation

The Pound advanced against the Swiss Franc on Tuesday as unfavourable Swiss data emerged and investor sentiment for UK rate hikes remained firm.

The seasonally adjusted Swiss Unemployment Rate rose from 3.1% to 3.2% in February. The non-seasonally adjusted measure remained at 3.5%, in line with estimates.

The State Secretariat for Economic Affairs reported: ‘Job seekers in February 2015 Total: 206,369 jobseekers were registered, 231 more than in the previous month. Compared to the same period last year that number went up by 435 persons (+0.2%).’

In addition, the Swiss National Bank has been reported to be contemplating dropping interest rates further into negative territory if the Franc moves further in the ‘wrong direction’. A source with insider information said ‘a rate of minus 1.5% is being considered.’ The Swiss National Bank seeks to counteract heightened investor sentiment in the Franc after it recently removed the cap between the Euro and the Swiss currency. A dip further into the negatives would mean depositors would have to pay more to keep their money in the central bank.

The speculation follows statements from SNB Chairman Thomas Jordan, who had suggested last month that there was plenty of flexibility on offer for the central bank to consider cutting rates again. Meanwhile, the Pound has remained upbeat against a host of other currency majors despite UK annual Like-For-Like Sales stagnating at 0.2% rather than rising to 0.5% in February as expected.

Industry expert David McCorquodale commented: ‘Activity on the high street had settled into a monotonous equilibrium, with falling like-for-like food sales persistently wiping out any meaningful like-for-like growth the non-food sector manages to achieve. February’s figures are also against very weak comparables, when bad weather caused sales to stall last year.’ In the rest of Tuesday’s session the Pound is likely to move as a result of Bank of England statements, with several officials expected to issue comments at various events.

Furthermore, no new Swiss data is expected in the rest of the week leaving the Franc vulnerable to shocks in the market and global developments. However, Wednesday could be more interesting for the Pound when UK Industrial Production and Manufacturing Production figures reach publication. The industrial sector is expected to rise from 0.5% to 1.3% in January on the year, while manufacturing is estimated to make a smaller rise from 2.4% to 2.6%. December’s industrial figure had recorded a -0.2% contraction and therefore the January 0.2% rise should be enough to boost annual progression.

Swiss Franc Exchange Rates Today:


The Swiss Franc to Australian Dollar exchange rate today is converting -0.37 per cent lower at 1.31361 CHF/AUD.
The Swiss Franc to Canadian Dollar exchange rate is -0.82 pct lower with a conversion rate of 1 CHF equals 1.26808 CAD.
The Swiss Franc to Euro conversion rate is +0.01 pct higher at 0.93530 CHF/EUR.
The Swiss Franc to Pound Sterling exchange rate today is converting -0.9 per cent lower at 0.66460 CHF/GBP.
The Swiss Franc to New Zealand Dollar exchange rate converts -0.14 per cent lower at 1 CHF is 1.37842 NZD.
The Swiss Franc to US Dollar exchange rate converts -1.11 per cent lower at 1 CHF is 1.00196 USD.

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