GBP/CHF Exchange Rate Falls despite Swiss-EU Uncertainty
The Pound Swiss Franc (GBP/CHF) exchange rate fell by 0.5% today, with the pairing fluctuating around 1.237Fr.
The Swiss Franc (CHF) rose against the Pound (GBP) following the release of the Swiss unemployment rate figures for June, which fell below forecast from 2.4% to 2.3%.
Swiss-EU relations are still in focus, however, leaving some CHF traders feeling cautious.
The International Monetary Fund (IMF), said in its most recent statement:
‘Uncertainty regarding long-term Swiss-EU relations could affect cross-border flows.’
Some analysts have seen this a benefit to the Swiss economy, as some of the biggest companies in Europe operate in Switzerland, meaning that trading volumes are increasing within the nation’s frontiers.
GBP/CHF Exchange Rate Decreases as UK Retail Sales Fall to Record Lows
The Pound, meanwhile, fell following the printing of the annual BRC like-for-like retail sales for June.
These fell below the consensus 0.8% increase to -1.6% – its worst performance in June since records began.
Helen Dickinson, a Chief Executive at the BRC, commented:
‘Overall, the picture is bleak… Rising real wages have failed to translate into higher spending as ongoing Brexit uncertainty led consumers to put off non-essential purchases.’
US-UK relations have remained in focus today, with US President Donald Trump lashing out following a leak that the British ambassador to Washington, Sir Kim Darroch, had called Mr Trump’s leadership ‘inept’ and ‘dysfunctional’.
Mr Trump tweeted today:
‘The wacky ambassador that the UK foisted upon the United States is not someone we are thrilled with, a very stupid guy. He should speak to his country, and prime minister May, about their failed Brexit negotiation, and not be upset with my criticism of how badly it was handled.’
As the US is one of the UK’s closest allies, this has caused some consternation amongst Sterling traders with fears of post-Brexit trade negations being complicated by recent developments.
GBP/CHF Forecast: Swiss Franc Safe-Haven Could Rise on Increased Global Tensions
Sterling traders will be looking ahead to tomorrow’s publication of the UK manufacturing and industrial figures for May.
Any signs of improvement could provide some uplift for Sterling, as this would ease fears that the UK’s economy is slowing down.
Tomorrow will also see the UK growth figures for May, which are, however, expected to improve from -0.4% to 0.3%.
Swiss Franc investors, meanwhile, will be paying attention to global political and economic developments.
Due to CHF being a safe-haven currency, any indications of flaring tensions between the US and China could have investors fleeing to the Swiss Franc, thus bolstering the CHF/GBP exchange rate.