January 19, 2017 - Written by James Fuller
STORY LINK Gold Prices Drop Off, Pound Swiss Franc Exchange Rate Improves
The British Pound to Swiss Franc exchange rate fluctuated on Friday afternoon as markets adjusted on ‘safe haven’ currencies ahead of Donald Trump’s Presidential inauguration, due to take place during the American session.
Demand for the Pound recovered slightly from the morning’s retail-sales related selloff. However, GBP/CHF was kept away from its best daily levels by news that gold prices had improved.
[Previously updated 19/01/2017]
Pound Franc Rate Gains after PM May Repeats Brexit Outlook
The Pound has risen up to a rate of 1.24 against the Swiss Franc today in the wake of a second speech by Prime Minister Theresa May.
May was speaking at the World Economic Forum (WEF) in Davos and while most of her statements were repeats from Tuesday’s more dramatic speech, the reiteration that she was looking for a mutually beneficial exit from the EU likely struck a chord with GBP investors.
Although fears have still been present that EU negotiators might be taking punitive measures against the UK to discourage others from leaving the EU, the present attitude is one of hope, shoring Sterling up against the softer Franc.
Pound Sterling Franc Rate Predicted to Advance if UK Retail Sales Climb on Friday
The last major UK news of the week will come on Friday morning - retail sales figures for December.
At the present time, forecasts have been for a drop on the month, but a rise on the year, for both the base stats and those excluding fuel sales.
Looking ahead to next week, Pound-shifting data will consist of Tuesday’s Government borrowing figures, as well as Thursday’s high-impact GDP growth rate estimates for Q4.
Closing major data releases on Friday will be the GfK consumer confidence print for January, which previously fell by -7.
Swiss Franc Losses Sourced from Falling Gold Costs, Rising Import Prices
While the WEF event has been ongoing in Switzerland this week, it has held precious little direct data for Franc investors to refer to.
As it stands, the only major news has been that producer prices in December have moved closer to positive figures, though so has the cost of importing into Switzerland.
In commodities news, the price of gold per 100 ounces has dropped to $1195 today, further lowering demand for the Swiss Franc.
CHF Outlook: Major Consumption Indicator Incoming, Gold Price Boost on the Horizon?
All hope may not yet be lost for the Swiss Franc, given that gold prices may shoot up on Friday due to Donald Trump’s inauguration.
Such a momentous event could well destabilise the US Dollar and send investors flocking to more stable alternatives, such as gold, thereby inflating the price.
More concretely, the next big Swiss news will be Wednesday’s UBS consumption indicator for December, which previously came in at 1.43.
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