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Pound Swiss Franc Exchange Rate News: GBP/CHF Steady as Swiss Inflation Remains Flat

July 4, 2019 - Written by John Cameron

Swiss Franc (CHF) Exchange Rates Flat as Swiss Inflation Steadies

The Swiss Franc (CHF) is trading in a narrow range against the Pound (GBP) and the majority of its other peers this morning as markets react to the release of Switzerland’s latest CPI figures.

According to data published by the Swiss Federal Statistical Office, inflation in Switzerland remained steady at 0.6% in June, beating expectations that it would have slipped to a low 0.5%.

However whilst CHF investors will be revived that consumer prices didn’t fall any lower, this still leaves inflation at a one-year low.

This is likely to fuel further expectations that the Swiss National Bank (SNB) will need to make additional cuts to its interest rates, with suggestions that this could happen as early as 2020.

Meanwhile, further limiting the appeal of the Swiss Franc is the risk-on mood that had prevailed in markets since the US-China trade truce was signed on the side lines of the G20 meeting last weekend.

While optimism had begun to fade earlier in the week, reports that US and Chinese diplomats will meet next week to discuss trade has helped to renew hopes that the two powers will be able to resolve their trade dispute in the coming months.

This has dampened the appeal of the safe-haven Swiss Franc as it encourages investors to move towards riskier assets.

Pound (GBP) Flat as UK Politics Back in Focus

Meanwhile, the Pound (GBP) is trending in a neutral range this morning as a lull in UK economy data turns the focus back towards UK politics as the Conservative leadership contest rolls on.

As expected, the contest has been dominated by the issue of Brexit, with Boris Johnson and Jeremy Hunt both eager to outdo one another by claiming they are the only ones who could deliver the Brexit that the British public voted for.

Much to the dismay of GBP investor however this has seen both candidates focus their attention on their commitment to leading the UK out of the EU in October and how they would navigate the complexities of no-deal Brexit, rather than what they could do to avoid a no-deal.

Unsurprisingly this has spooked GBP investors, and has resulted in markets shunning the Pound this morning.

GBP/CHF Exchange Rate Forecast: Will a Slide in House Prices Dent Sterling?

Looking ahead, the Pound Swiss Franc (GBP/CHF) exchange rate may begin to give ground at the tail end of this week’s session following the publication of the UK’s latest house price index.

Economists forecast that Brexit jitters will have weighed on the housing market again last month, likely leading to a slide in house prices which could dampened the appeal of Sterling.

Meanwhile, the absence of any notable domestic data will see CHF investors turn their focus towards next week’s session, where an expected rise in Switzerland’s unemployment rate in June could weaken the Swiss Franc.

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