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GBP to CHF Exchange Rate Climbs on Brexit Hopes and Higher Risk-Sentiment

April 30, 2019 - Written by Tim Boyer

After edging higher yesterday on slightly weaker market demand for safe haven currencies like the Swiss Franc, the British Pound to Swiss Franc (GBP/CHF) exchange rate has seen stronger gains today so far as risk-sentiment continues to rise and the Pound benefits from the latest Brexit hopes. Could the UK government really reach a Brexit compromise soon though?

Due to some higher demand for safe haven currencies for much of last week, GBP/CHF spent most of the week trending lower after briefly touching on a monthly high of 1.3272 earlier in the week. Ultimately, GBP/CHF only slipped slightly from 1.3181 to 1.3170 throughout the week.

This week’s movement has been more bullish in comparison so far. GBP/CHF saw modest gains yesterday and a jump in demand today, supported by the latest bullish Brexit speculation. At the time of writing today, GBP/CHF trended closely to the level of 1.3236.

On top of Brexit hopes, the Pound to Swiss Franc exchange rate has also been more appealing due to weak Switzerland data weighing on the Franc.

GBP Exchange Rates Advance on Revived Hopes for Brexit Compromise


Following weeks of uncertainty over how the UK will proceed next with Brexit, signs that things may finally be moving are making Pound investors more optimistic this week.

The government spent most of April in talks with opposition Labour Party over a possible compromise that could lead to a softer Brexit, and help it to pass through Parliament.

For much of the month, officials and markets speculated that there hadn’t been much in the way of developments in talks.

As a result, the Pound became more appealing on this morning’s speculation that officials were becoming more positive.
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Reportedly, Labour Party officials have begun to sound more optimistic about the chances of a deal being met.

This, as well as speculation that the Labour Party could officially announce some kind of support for the possibility of a second referendum, made the Pound more appealing today.

Sterling was little affected by the morning’s disappointing UK consumer confidence report from GfK, which remained at -13 instead of improving to -12 as expected.

CHF Exchange Rates Fail to Hold Ground as Safe Haven Demand Lightens


The Pound’s stronger demand was the primary cause of GBP/CHF gains today, but weaker market demand for safe haven currencies like the Swiss Franc made it easier for the pair to advance.

The Swiss Franc, as a safe haven currency, often weakens in times of strong risk-sentiment and trade sentiment in markets.

As US-China trade negotiations are resuming today, and other safe haven currencies like the US Dollar (USD) have seen weaker performance this week so far, investors have been more willing to take risks and this has led to Swiss Franc weakness.

On top of this though, the Swiss Franc is being pressured by speculation that the Swiss National Bank (SNB) could further ease monetary policy if Switzerland’s economy is notably effected by the global economic slowdown.

According to a recent comment from SNB President Thomas Jordan:

‘We always have the possibility of lowering rates further. We have already gone quite far, but still we've got the necessary room to maneuver,

And we can, if necessary, expand the balance sheet further via interventions.’


Switzerland’s economy is doing fairly well currently, but as the nation’s latest KOF leading indicators report fell short of expectations with a result of 96.2, investors are still wary for the possibility of the outlook worsening.

GBP/CHF Exchange Rate Forecast: Brexit Developments and Major Swiss Data in Focus


The Pound is seeing strong demand today, but it could just as easily give up those gains if the next few days come and go without any notable Brexit developments.

Investors are buying the Pound in hopes for some Brexit progress, so Sterling would tumble again if the government’s Brexit talks fail to produce any optimistic results, or if Parliament remains overall no closer to any kind of path to a solution.

Of course, if there are any solid Brexit developments, the Pound could see a further surge in demand instead.

While Brexit developments have the biggest potential to influence GBP/CHF movement in the coming days, some late-week data from Switzerland may prove influential as well.

Thursday will see Swiss retail sales and manufacturing, with consumer confidence and inflation following on Friday. If these impress investors, the Pound to Swiss Franc exchange rate’s potential for gains would be limited.
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