Eurozone Retail Sector Slump Piles Additional Pressure on Swiss Franc
Poor data from the Eurozone has added to Swiss woes. The Retail Sector PMIs for Germany, France, Italy and the Eurozone have dipped below the key 50 mark, showing that the sector shrunk during November.
Earlier…
Pound Sterling has been able to make significant advances on the Swiss Franc after yet another disappointing data release for Sweden, showing that deflation continued at the same pace as last month. The UK has had a mixed week as well, although a drop in demand for the Franc following yesterday’s Euro surge has helped the GBP/CHF exchange rate to rise.
GBP/CHF Exchange Rate Trending High as Service Sector Drives Economic Growth
The UK is on track to end 2015 with news of positive economic growth after the Markit Services PMI showed that the UK has Europe’s second-fastest growing service sector after Spain. The figures, released during yesterday’s London session, showed that the sector growth accelerated more-than-forecast, rising from 55.4 to 55.8. After the manufacturing and construction PMIs disappointed, the composite index remained level as services picked up the slack and continued to be the main driving force behind UK economic growth.
According to Markit, UK GDP will rise from 0.5% to 0.6% during the fourth quarter. Input prices for the service sector, which covers costs including wages, increased at the fastest rate in four months. Even with the disparity, the Bank of England (BoE) will see that the economy continues to weather global economic conditions, demonstrating robust levels of growth. Despite this, economists still do not believe the BoE is likely to raise interest rates at its next meeting on Thursday 10th of December.
The GBP/CHF exchange rate has advanced 0.6% to trend around 1.5132.
CHF/GBP Exchange Rate News: Poor Swiss Inflation Figures Round Off Bad Data Week
Sweden’s economy hasn’t been performing as expected according to a week’s worth of disappointing data. Today’s Consumer Price Index shows that deflation remains at -1.4%, quashing predictions of a rise to -1.3%.
The Swiss Franc had ticked up yesterday following the European Central Bank’s (ECB) softer-than-anticipated monetary stimulus decision, which had caused investors to stay away from the Franc amid concerns the Swiss National Bank (SNB) would be forced to respond with action of its own.
However, today’s figures further add to the bad news released this week, which started on Monday when the KOF Leading Indicator (a 6 month economic outlook based upon 12 economic factors) fell from 100.4 to 97.9. Tuesday’s data revealed that Gross Domestic Product remained flat in the third quarter, with Year-on-Year GDP dipping from 0.9% to 0.8%. Retail Sales shrank by -0.8% and the SVME-Purchasing Managers Index dipped below the important 50 mark to 49.7.
The CHF/GBP exchange rate is currently trading between 0.6598 and 0.6660.
GBP/CHF Exchange Rate Forecast: Eurozone GDP Next Week Could Cause Swiss Franc Movement
Sweden has strong political and economic links with neighbouring European countries, including over 100 trade agreements, so the Franc’s value is closely tied to the strength or weakness of the Eurozone economy. Tuesday’s Eurozone GDP figure could therefore spark movement in CHF exchange rates.
The GBP/CHF exchange rate is currently trending between 1.4997 and 1.5146.
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