Risk of GBP/CHF Exchange Rate Losses on Falling UK Business Optimism
The Pound (GBP) has traded higher against the Swiss Franc (CHF) so far today, but is in danger of declining when Confederation of British Industry (CBI) data comes out.
Due in the near-future, the CBI’s ecostats will cover reported business optimism for Q4 2018 along with an industrial orders reading for October.
Current expectations are for the already-negative business optimism reading to fall from -3 points to -8; industrial orders are tipped to reprint at -1 points.
Both results would do little to raise GBP trader confidence and could instead lead to clear GBP/CHF exchange rate losses.
Falling business optimism risks lower investment and sector difficulties in the future, so forecast-matching data could ensure a GBP/CHF exchange rate decline.
Will BoE Speeches Restore GBP Trader Confidence?
Beyond a potential GBP/CHF exchange rate downturn on the CBI data, the Pound could recover and rise against the Swiss Franc on Bank of England (BoE) speeches this week.
BoE Chief Economist Andy Haldane and Governor Mark Carney will both be speaking later today and could support a GBP/CHF exchange rate rise.
Additional support could come from remarks from BoE official Sam Woods when he speaks on Thursday.
If all three policymakers hint at an interest rate hike in 2019 then the Pound could rise sharply against the Swiss Franc.
A rate hike next year was put in doubt by a recent UK inflation rate slowdown, which clashed with higher-than-expected wage growth.
BoE policymakers are not known for explicitly signposting when interest rates could be raised, but still have the potential to boost Pound Sterling with their remarks.
Swiss Franc to Pound (CHF/GBP) Exchange Rate Outlook: Are Losses ahead on Leading Indicator Score?
The Swiss Franc’s (CHF) recent losses against the Pound (GBP) could be extended next week, when a leading indicators figure is tipped to show a slight decline.
Acting as a measure of business confidence across Switzerland, the KOF leading indicator on 30th October is expected to fall from 102.2 points to 101.
This wouldn’t mean a surge in Swiss business pessimism, but could still cause Swiss Franc to Pound exchange rate losses as it would be a disappointing development.
Swiss Inflation Rate Slowdown Might Worsen CHF/GBP Exchange Rate
Another upcoming data release that could devalue the Swiss Franc (CHF) will be inflation rate figures out on 1st November.
Covering reported price growth in October, these figures are expected to show a slowdown in the pace of inflation growth for the year-on-year reading.
A forecast-matching dip from 1.1% to 0.9% could be enough to drag the Franc down against the Pound.
The Swiss central bank has kept interest rates at -0.75% since 2015 and falling inflationary pressure is unlikely to make a rate hike any more probable.