Chance of GBP/CHF Exchange Rate Turbulence on BoE Policy Meeting
The Pound (GBP) has risen by 0.5% against the Swiss Franc (CHF) today, rising near to a one-week exchange rate high.
This appreciation comes ahead of Thursday’s Bank of England (BoE) policy meeting, which could lead to greater gains for Pound Sterling.
The current market hopes are for BoE officials to back a 2019 interest rate hike, despite the continuing uncertainties associated with the Brexit process.
If policymakers, including BoE Governor Mark Carney, do voice their support for higher UK interest rates in 2019 then the Pound could rise sharply against the Swiss Franc.
UK Services PMI Growth could Boost GBP/CHF Exchange Rate
Looking beyond the BoE meeting, Pound Sterling (GBP) could also be affected by this week and next week’s PMI readings for October.
Thursday will bring a manufacturing PMI figure while construction stats are out on Friday; the main ecostat will be Monday’s services reading.
A manufacturing and construction PMI slowdown could cause GBP/CHF losses before the weekend, but if the services PMI rises then such losses could be reversed.
The services sector reading is the most important of the three, as services are the single largest contributor to UK economic growth.
If the services sector PMI rises by more than expected then any GBP/CHF exchange rate gains could also stretch further.
Swiss Franc to Pound Forecast: Will CHF/GBP Exchange Rate Rise on Inflation Rate Data?
The Swiss Franc (CHF) has fallen against the Pound (GBP) today, following the news that Swiss economic confidence has fallen in October.
The latest economic sentiment index reading declined from -30.8 points to -39.1, when economists had been predicting an improved score of -26.
Looking ahead, the Swiss Franc could appreciate and rise against the Pound on Thursday, when Swiss inflation rate data is due to come out.
The price growth readings for October are tipped to show an acceleration on the month and the year, with respective shifts from 0.1% to 0.2% and from 1% to 1.1%.
A faster pace of inflation could encourage Swiss Franc trading and cause a CHF/GBP exchange rate rise, given the positive implications for such data.
Higher inflation puts more pressure on the Swiss National Bank (SNB) to raise interest rates; rates have been left at -0.75% since 2015.
Additional Swiss Franc Outlook: Are CHF/GBP Exchange Rate Gains ahead on Retail Sales Stats?
The Swiss Franc (CHF) could receive additional support against Pound Sterling (GBP) later this week, when Swiss retail sales figures come out on Friday.
Covering reported sales activity in September, these sales stats are expected to show a monthly rise but a potential year-on-year slowdown.
It is worth remembering that these are only estimates, so the actual retail sales readings could show a CHF-boosting rise in monthly and annual retail sales activity.