GBP/CHF Exchange Rate Steadies as Swiss Growth Figures Rise
The Pound Swiss Franc (GBP/CHF) exchange rate is flat today and is currently trading around 1.2734Fr on the interbank market.
The Swiss Franc (CHF) steadied against the Pound (GBP) following the publication of the Swiss GDP figures for the first quarter, which rose above forecast at 0.6% against the previous 0.3%.
The annual GDP figures also improved above the consensus, rising to 1.7%.
David Oxley, a Senior Europe Economist at Capital Economics, was generally optimistic about the Swiss economy, saying:
‘[The quarterly increase] offers some comfort that the Swiss economy has put the weak patch in the second half of 2018 behind it.’
‘Looking ahead, leading indicators are consistent with quarterly GDP growth slowing over the rest of the year. We expect the Swiss economy to expand by about 1 per cent in 2019, a touch faster than in the Eurozone, although the risks to our forecast are probably now on the upside.’
The Pound, meanwhile, has remained subdued against many of its competitors on renewed Brexit uncertainty, and doubts setting in over the leadership for the Conservative Party – Theresa May is set to step down from leadership as early as 7 June.
GBP/CHF Exchange Rate Flat as UK Major Parties Gloomy Following Brexit Party Rise
Sterling has continue to struggle as MPs within the major parties remain gloomy over the future of their parties.
Jeremy Hunt, the Foreign Secretary, tellingly commented:
‘I want to solve the Brexit crisis we are in and I’m worried if we don’t solve it we will face a political crisis that is far bigger than our legal relationship with the EU; it could lead to the destruction of our party system and the end of my own party.’
The European Elections, meanwhile, have left their mark on UK politics, with the two major parties firmly challenged by the overwhelming favourability of the newly-formed Brexit Party, headed by the Brexiter MEP Nigel Farage.
CHF/GBP Exchange Rate Steadies as Swiss Trade Balance Figures Ease
Today also saw the publication of the Swiss trade balance figures for April, which eased to 2,294M against March’s 3,247M.
The Swiss Government Economist Ronald Indergand, remained downbeat on any likelihood of upgrading the economic forecast for 2019.
‘Our current view for below-average growth in Switzerland this year remains our base-case scenario. Even after the strong first quarter I don’t expect we will have to substantially change this picture. The general environment has stayed the same and in some cases has deteriorated.’
GBP/CHF Forecast: Signs of a Second Referendum Would Provide Uplift for Sterling
Swiss Franc traders will be looking ahead to the Swiss ZEW Survey of business expectations for May tomorrow, and with any signs of improvement this could buoy the CHF/GBP exchange rate.
Tomorrow will also see the Swiss KOF leading indication for May, which is expected to ease slightly against last month.
Sterling traders, meanwhile, will be keeping their close attention on political developments, as both major parties are continuing to recover from their defeat during the European Elections, and with Brexit uncertainty running high, any signs of a second referendum would provide some uplift for the Pound.