Pound Sterling to Swiss Franc (GBP/CHF) Exchange Rate – Franc firmed on China concerns

The Swiss Franc pushed higher against most major peers on Monday morning before it drifting lower as concerns over China’s slowing economic growth increased demand for the safe-haven currency.

A report released by the National Bureau of Statistics showed that the Chinese economy expanded by 7.7% in 2013, the same pace as the prior year which was the slowest pace recorded since 1999. The report renewed concerns that the world’s second largest economy is on the verge of a slowdown and created demand for safe havens.

The report initially spooked investors which led to the Franc’s gains but as the morning wore on concerns lessened.

“It’s very much within the range of what the government was aiming for, the fact is that the Chinese economy mustn’t and can’t grow at the double digit rates we’re used to seeing. And in some regards slower growth is actually encouraging because it suggests that it’s moving to a more sustainable pace,” said David Wilder, head of the Beijing bureau of Market News International, a financial information provider.

As a result of the report the Franc pushed away from a four-day low against the Euro and ticked higher against the Pound and other peers. A weaker than expected PPI report out of Germany showed that prices declined for a fifth consecutive month in the Eurozone’s largest economy and increased concerns over deflation.

As the morning progressed the Franc softened against Sterling following the release of data which showed UK house prices made their biggest increase in January in more than ten years after surging by 6.3% in a year. Booming demand, the Government’s Help to Buy scheme and a lack of available properties have helped push up the asking price.

The Franc could experience volatility on Tuesday once the latest ZEW investor sentiment report for Switzerland is released. Economists are forecasting a fall.