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Pound Swiss Franc (GBP/CHF) Exchange Rate Muted on President Trump’s Upbeat Trade Comments

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Pound Sterling Swiss Franc (GBP/CHF) Exchange Rate Flat as Swiss Investor Sentiment Rises

The Pound Sterling Swiss Franc (GBP/CHF) exchange rate was left muted this morning, with the pairing trading at around 1.2831Fr.

On Wednesday, data from ZEW revealed the Swiss investor sentiment index rose to -3.9 in November from -30.5 in October.

This was the highest the index has jumped since June 2018, although this did little to buoy the Franc.

However, upbeat comments on US-China trade negotiations and a ‘phase one’ deal provided markets with a slight upswing in risk appetite, which left the safe-haven Swiss Franc muted against GBP.

Swiss Franc (CHF) Muted as US-China Deal in ‘Final Throes’

The pairing was left muted on Wednesday as traders continue to look ahead to a possible outcome in US-China trade talks.

Overnight, US President Donald Trump said that they were in the ‘final throes’ of work on a ‘phase one’ deal after Tuesday’s telephone call.

However, gains in risk appetite was limited as he emphasised support for the Hong Kong protestors, something Beijing has warned Washington against.

Commenting on this, director of forex at Societe Generale in Tokyo, Kyosuke Suzuki noted:

‘Judging from Trump’s comments, an agreement will have to wait at least until the weekend.’

However, the mixed reports on trade left the safe-haven Swiss Franc flat against Sterling.

Commenting on this, head of FX strategy at National Australia Bank, Ray Attrill said:

‘The market is tired of playing headline ping pong with respect to trade.

‘The equity market still seems to want to push on and believe optimistically that a trade deal is going to be done, but I think the FX market and the bond market have given up playing that game.’

Pound (GBP) Under Pressure as Conservative Lead Narrows

Sterling was left under pressure as opinion polls revealed the Conservative Party’s lead against opposition parties was narrowing.

Ahead of 12th December election, a Kantar poll published yesterday showed that Labour squeezed the Tory lead advantage from 18 points to 11.

This was the second poll in two days showing the ruling party’s lead was narrowing, as Monday’s ICM poll showed their 10-point lead fall to a seven-points in just a week.

However, many analysts predict Boris Johnson’s Conservatives are headed for victory next month.

Commenting on this, fixed income and FX strategist at SEB, Lauri Hälikkä noted:

‘The Pound has strengthened as a reassuring Tory majority would mean that the risk of hard Brexit is small while avoiding political lock-ups in Parliament and getting a growth-oriented economic policy.

‘A Labour victory would certainly give a softer Brexit but also very radical socialist policies, which few believe would be good for the Pound.’

Pound Swiss Franc Outlook: Will CHF Rise as GDP Rebounds?

Looking ahead to Thursday, the Swiss Franc (CHF) could rise against the Pound (GBP) following the release of Switzerland’s Q3 GDP data.

If annual GDP rises higher than expected, rebounding from the second quarter’s disappointing reading, Franc sentiment will rise.

Meanwhile, Sterling is likely to remain under pressure if further polls reveal the Conservative Party’s lead over Labour continues to narrow.

If further opinion polls show the Tory Party is losing support, it could cause the Pound Swiss Franc (GBP/CHF) exchange rate to slide.