Pound to Swiss Franc (GBP/CHF) Exchange Rate Edges Higher as Outlook for Swiss Economy Dims

December 3, 2020 - Written by John Cameron

STORY LINK Pound to Swiss Franc (GBP/CHF) Exchange Rate Edges Higher as Outlook for Swiss Economy Dims

GBP/CHF Exchange Rate Rises as Safe-Haven Demand Sinks on Covid-19 Vaccine Rollouts

The Pound to Swiss Franc (GBP/CHF) exchange rate rose by 0.5% today, with the pairing currently trading around 1.202fr.

The Swiss Franc (CHF) fell today following the release of the Swiss Consumer Price Index for November, which fell unexpectedly by -0.7%.

As a result, demand for CHF has fallen as the outlook for the Swiss economy looks increasingly uncertain as we head towards the end of the year.

Meanwhile, demand for the safe-haven Swiss Franc has been compromised by growing optimism over Covid-19 vaccine rollouts.

The Swiss Franc has suffered from buoyant risk sentiment on hopes that the global economic situation could improve in the next few months.

Switzerland’s economy could be on the mend, however, following news that Switzerland has halved new Covid-19 infections, allowing pubs and restaurants to remain open.

Consequently, we could see the CHF/GBP exchange rate head higher if the outlook for the nation’s economy continues to brighten.

Pound (GBP) Rises as Covid-19 Cases Drop

The Pound rose today after the NHS Track-and-Trace programme revealed that the number of positive Covid-19 cases has dropped significantly after late November.

As a result, UK markets are becoming more optimistic that the British economy could begin to recover faster than expected in the months ahead.

The Department of Health and Social Care said that 110,620 people had tested positive for the coronavirus during the week ending on 25th November.

Meanwhile, UK markets are also more confident that the UK could secure a post-Brexit trade deal with the European Union (EU) as talks enter a critical stage.

Ireland’s Foreign Minister, Simon Coveney, said that we could see a Brexit deal in just a matter of days.

In UK economic news, today saw the release of the Services PMI for November, which rose to 47.6.

Nevertheless, with the UK’s largest sector still in contraction territory, this failed to boost confidence in the nation’s economy.

Duncan Brock, the Group Director at the Chartered Institute of Procurement and Supply, said:

‘After four months of welcome recovery, November’s figures revealed an inevitable downturn in the services sector, as further lockdown restrictions impacted customer-facing businesses and any new work was rapidly extinguished. Though the rate of depletion of new orders had softened from the previous month, this reduction was at least in part due to the reduced capacity for new work in firms still operating in a shrinking marketplace.’

GBP/CHF Outlook: UK Construction Data and Brexit in Focus

Pound (GBP) traders will be awaiting tomorrow’s release of the UK Construction PMI for November.

Any improvement in the UK’s construction sector would be GBP-positive.

Meanwhile, Brexit developments will also continue to drive Sterling.

As a result, the GBP/CHF exchange rate could head higher if there are any further signs that the UK and the EU could agree on a post-Brexit deal.

The Swiss Franc, meanwhile, will likely remain subdued as risk sentiment improves as Covid-19 vaccine rollouts are announced throughout the world.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Swiss Franc Forecasts Swiss Franc Forecasts