GBP/CHF Exchange Rate Dips as Brexiter Boris Johnson Becomes Favourite for Next PM
The Pound Swiss Franc (GBP/CHF) exchange rate fell by -0.24% this morning, leaving the pairing fluctuating around 1.224CHf.
The Pound (GBP) eased against the Swiss Franc (CHF) as no-deal Brexit fears increase ahead of the announcement of the new Conservative Party leader and Prime Minister, which is due tomorrow.
As hard-Brexiter Boris Johnson is the favourite to win, many Sterling traders are feeling increasingly jittery on no-deal fears.
Philip Hammond, the Chancellor of the Exchequer, has also announced his resignation ahead of Boris Johnson’s likely win ahead of Thursday.
Mr Hammond said:
‘It’s very important that the prime minister is able to have a chancellor who is closely aligned with him in terms of policy and I therefore intend to resign to Theresa May before she goes to the palace to tender her own resignation on Wednesday.’
Sterling traders are becoming increasingly jittery over political developments this week amidst a lack of influential UK economic data.
CHF/GBP Exchange Rate Edges Higher Despite Fears of Swiss Bank Interest Rate Cuts
The Swiss Franc, meanwhile, is trading well against the Sterling today, despite increasing pressures on the Swiss National Bank President Thomas Jordan.
As the European Central Bank outlines its plans for stimulus, this could lead to a dramatic shift in the pair and encourage Jordan to take action in the next meeting in September.
This could lead the Swiss National Bank to cut its interest rates even lower, leaving many Swiss Franc traders feeling cautious.
In other news, Switzerland’s third-largest bank, Julius Baer, posted a 19% de3cline in its net profits in the first six months of 2019.
Bernhard Hodler, the Outgoing Chief Executive at the bank, was bullish, however, saying:
‘Profitability has markedly improved compared to the second half of 2018, as we saw client activity and asset valuations recover substantially. The cost-reduction program we initiated earlier this year is on track, and we will see its effects materialise in the coming months and throughout 2020, as targeted.’
GBP/CHF Outlook: UK Prime Minister Announcement in Spotlight
Sterling traders are looking ahead to tomorrow’s speech by Andrew Haldane, the Chief Economist at the Bank of England.
Any dovish comments about the UK economy could prove Pound-negative.
However, the Tory leadership announcement will remain in the spotlight tomorrow.
We could see the Pound begin to fluctuate following the announcement.
Due to Boris Johnson being a favourite to win, however, no-deal Brexit fears will likely rise, providing some downwards pressure on the GBP/CHF exchange rate.
Swiss Franc traders, meanwhile, will be focusing on global political developments.