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Pound Ticks Higher on Annual Retail Sales Growth, GBP/CHF Exchange Rate Trending Narrowly

Swiss Franc Currency Forecast

British Pound to Swiss Franc (GBP/CHF) Exchange Rate Forecast to Hold Steady as ‘Brexit’ Uncertainty Limits Sterling Gains

The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate was trending within a limited range on Thursday afternoon.

Over the past few days the British Pound has shed a lot of its value amid political uncertainty. The tragic terrorist attacks in Brussels had a particularly adverse impact on demand for the Pound because pro-‘Brexit’ campaigners suggested the events were evidence that the UK is safer outside the European Union.

A long speech from London Mayor Boris Johnson on the benefits of a British exit from the European Union also triggered Sterling depreciation.

However, on Thursday the British asset made moderate gains versus a number of its major peers, although the currency is still holding a comparatively weak trade weighting. The appreciation can be linked to better-than-expected domestic data which showed February’s Retail Sales growth eclipsed forecasts on both a monthly and annual basis.

Several analysts are sceptical that consumer spending will maintain current momentum, however. ‘Looking ahead, it’s hard to see how the recovery in consumer spending can maintain its current momentum. The tighter fiscal squeeze, the recent moderation of firms’ hiring plans and the looming pick-up in inflation all suggest that the spending recovery will lose its vim this year. We expect year-over-year growth in real household spending to ease to about 2.5% this year, from 3% in 2015.’ Stated Samuel Tombs at Pantheon Macroeconomics.

The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate is currently trending in the region of 1.3764.

Swiss Franc to Pound Sterling (CHF/GBP) Exchange Rate Forecast to Trend Statically Even after Deflationary Concerns Ease

Thanks to safe-haven demand and the prospect of a weaker Euro following the European Central Bank’s Economic Bulletin, the Swiss Franc appreciated versus a number of its peers on Thursday.

The Swiss National Bank (SNB) published its annual report which showed that the central bank did not conduct any monetary policy-related open market operations last year, with the exception of foreign currency purchases.

Despite negative inflation and negative interest rates, deflationary concerns have eased with commodity prices looking to climb. Economist Tim Clayton stated; ‘Although the Swiss National Bank (SNB) would prefer a weaker exchange rate and remains committed to intervention if required to influence exchange rates, overall concerns surrounding deflation risks have eased and medium-term inflation expectations remain stable. The adverse impact on trade and growth from a strong currency has also been less severe than expected, also lessening demands for even more radical monetary policy action.’

The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate dropped to a low of 1.3717 during Thursday’s European session.

Pound Sterling to Swiss Franc (GBP/CHF) Exchange Rate Forecast: Market Sentiment to Dictate Movement

Given the complete absence of domestic data pertaining to both the UK and Switzerland tomorrow, there is potential for the GBP/CHF exchange rate to hold steady for the remainder of the week.  What’s more, currency markets are expected to be subdued with several nations on holiday for the Easter break.

The coming week will likely see GBP/CHF volatility in response to a number of domestic ecostats. However, data may well take a back seat with market sentiment and political developments more likely to dominate trader focus.

Friday of next week will perhaps see the most GBP/CHF volatility with the publication of Swiss Retail Sales data and the UK Manufacturing PMI.

The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate reached a high of 1.3797 during Thursday’s European session.

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