Pound Swiss Franc (GBP/CHF) Exchange Rate Rises as Carney Hints at Interest Rate Cut
The Pound Sterling Swiss Franc (GBP/CHF) exchange rate rose and the pairing is currently trading at an inter-bank rate of 1.2395Fr.
Speaking to the Treasury Select Committee, Bank of England (BoE) Governor, Mark Carney hinted that the bank may cut interest rates to protect the economy from a damaging no-deal.
Carney stated that the current no-deal Brexit fears are damaging the economy, especially business investment and short-term economic performance.
However, he also noted that the bank is still preparing for a no-deal Brexit.
Governor Mark Carney stated:
‘We are spending all out time preparing for a no-deal, because that’s what we do – we prepare for the worst outcome.
‘If we prepare for the worst case any upside we get in terms of fewer tariffs, greater trade is to the benefit of the economy.’
Sterling (GBP) Rises despite No-Deal Brexit Fears
The Pound rose against the Swiss Franc despite increased fears of a no-deal Brexit as the Conservative leadership contest continued.
Front-runner, Boris Johnson has insisted that the UK must leave the European Union on 31 October ‘come what may, do or die.’
Johnson has challenged fellow leadership contender, Jeremy Hunt to make the same commitment.
However, Hunt has stated that while he would leave the EU without a deal, he would avoid this if there was the ‘prospect of a better deal.’
Former Brexit Secretary, Dominic Raab accused Hunt of showing ‘weakness’ and ‘naivety’ and stated:
‘The minute you start flirting with an extension, you undermine your negotiating leverage.’
Swiss Franc (CHF) Slides as Economic Sentiment Slumps
On Wednesday morning the Swiss economic sentiment index slumped from -14.3 in May to -30 in June.
The survey slumped to a five month low, which likely weighed on the Franc.
The data suggests that there continues to be lingering uncertainty in the region thanks to the current trade tensions.
Meanwhile, US Treasury Secretary Steven Mnuchin has said that the US-China trade deal is around 90% complete.
Speaking to CNBC’s Hadley Gamble, Mnuchin said:
‘We were about 90% of the way there [with a deal] and I think there’s a path to complete this.’
The Treasury Secretary also noted that he was confident that President Trump and Chinese leader Xi Jinping can make progress.
Pound Swiss Franc Outlook: Will GBP Slide on Disappointing UK GDP?
Looking ahead to the end of the week, the Pound (GBP) could fall against the Swiss Franc (CHF) following the release of the UK GDP.
If data reveals that the UK economy did not expand as much as forecast in the first three months of 2019, it could weigh on Sterling.
Meanwhile, the Pound is also likely to remain under pressure as the Conservative leadership contest continues.
If both Boris Johnson and Jeremy Hunt reaffirm that they would be willing to support a no-deal Brexit, the Pound Swiss Franc (GBP/CHF) exchange rate may slump.