Pound Swiss Franc (GBP/CHF) Exchange Rate Flat as UK Services Returns to Growth
The Pound Sterling Swiss Franc (GBP/CHF) exchange rate remained flat and the pairing is currently trading at an inter-bank rate of 1.3271Fr.
IHS Markit revealed on Friday that while the UK service sector returned to growth in April, subdued demand continues.
The UK service PMI edged up from a 32-month low of 48.9 in March to 50.4 in April.
For the fourth consecutive month new business fell, and new sales to overseas customers continued to soften.
However, service providers signalled the largest degree of positive sentiment since September 2018.
Commenting on the data, Group Director at the Chartered Institute of Procurement and Supply said:
‘One positive note appears to be the rise in optimism about the future possibly related to the postponement of the Brexit deadline. Whether this is triumph of hope over experience, or grim tenacity, the sector has a poor environment of support as the Brexit fog continues to envelope the UK economy. It is worth pointing out that this present period of deteriorating new business volumes is the longest since the last recession in 2009.’
Swiss Franc (CHF) Flat despite Rise in Swiss Inflation
The Swiss Federal Statistics Office revealed that Switzerland’s Consumer Price Index (CPI) rose by 0.2% between March and April.
This was the smallest rise in monthly inflation since January
Meanwhile, year-on-year, inflation rose by 0.7% as forecast.
However, this could do little to buoy the Swiss Franc against the Pound.
Sterling (GBP) Flat as BoE Leaves Interest Rates Unchanged
On Thursday, all nine Bank of England (BoE) policymakers voted to leave interest rates unchanged at 0.75%.
The Bank also upgraded growth forecasts, now predicting the UK economy will grow by 1.5% in 2019.
The BoE said that while stockpiling gave the economy a short-term boost, the strengthening of the global economy will have a greater effect.
In the Bank’s minutes from its latest monetary policy meeting, the BoE said:
‘Global growth had showed signs of stabilisation, and had been a little better than expected.’
However, during a press conference, Governor Mark Carney warned interest rate hikes could be more frequent, stating:
‘If something broadly like this forecast comes to pass […] it will require interest rate increases over that period and it will require more, and more frequent interest rate increases, than the market currently expects.’
Pound Swiss Franc Outlook: Will the GBP/CHF Exchange Rate Slide on Disappointing British Retail Sales?
Looking ahead to the start of next week, the Pound (GBP) could slide against the Swiss Franc (CHF) following the release of the Halifax house prices.
If house prices fall further than forecast in April, sentiment in Sterling could be dampened.
The British Retail Consortium’s like-for-like retail sales released on Wednesday could also cause Sterling to slide.
If April’s like-for-like sales fall further than forecast, the Pound Swiss Franc (GBP/CHF) exchange rate could slide.