December 3, 2018 - Written by John Cameron
STORY LINK Pound to Swiss Franc Exchange Rate Rangebound despite Threats of UK’s ‘Constitutional Crisis’
GBP/CHF Exchange Rate Treads Water amid Concerns over Downing Street’s Brexit Legal Advice Release
The Pound Swiss franc (GBP/CHF) exchange rate is treading water today, and is currently trading at CHf1.2730, as Prime Minister Theresa May came under pressure over the release of the legal advice received during the drafting of her Brexit withdrawal agreement.
With Downing Street deeming its legal advice ‘confidential’, this has caused further concerns from Parliament with the opposition Labour Party saying a ‘constitutional crisis’ could occur if the full legal tests are not forthcoming.
Last Friday, CHF was hit with the release of the KOF economic health barometer showing 99.1 in November – a decrease of -1.1 on October’s figure.
This came on the back of Thursday’s GDP release for the third-quarter, showing 2.4% growth – a significant decrease of 1.1% on last year.
Pound Swiss Franc (GBP/CHF) Exchange Rate Steady after Positive Manufacturing Figures
The Pound (GBP) found some strength today from the release of last month’s manufacturing PMIs, which show 53.1 – a significant increase on October’s figure.
However, Rob Dobson of Markit commented on these figures, saying they were generally ‘lacklustre’ with ongoing global trade tensions and Brexit uncertainty weighing on Sterling, further dampening the outlook for the year ahead.
As Theresa May rallies to gain support for her Brexit withdrawal deal ahead of the December 11 vote, concerns over a ‘no-deal’ and a possible second referendum continue to dent GBP investors’ confidence.
The Secretary of State for Environment, Food and Rural Affairs, Michael Gove, said:
‘There is a real risk that if we don’t vote for this deal then there is a majority for a second referendum and there is a real risk that if we don’t vote deal then we will get a less good deal or no deal at all.’
CHF/GBP Exchange Rate Rangebound despite Increased Retail Sales
The Swiss franc (CHF) meanwhile was bolstered by the release of retail sales this morning, which showed 0.8% growth in November, compared to October’s slippage of -2.25%.
These were supported by the release of the manufacturing PMI which printed at 57.7, with any figure above 50 indicating expansion.
However any gains caused by this positive data may be clipped by tomorrow’s release of the consumer price index for November, which is expected to decrease against last year’s by 0.1%, showing a slowing down in purchasing trends ahead of the holiday season.
GBP/CHF Outlook: Brexit Remains in Focus
The GBP/CHF exchange rate is likely to remain sensitive to political developments rather than economic ones this this week, with Brexit continuing to dominate headlines.
Tuesday will see the governor of the Bank of England, Mark Carney, deliver a speech which will have GBP investors listening out for any signs that indicate a gloomy outcome for a ‘no-deal’ Britain.
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TAGS: Pound Swiss Franc Forecasts