Pound to Swiss Franc Exchange Rate Outlook Remains Low Amid Steady Swiss Data
Despite concerns that the Swiss National Bank (SNB) could intervene in currency markets to prevent the Swiss Franc (CHF) from strengthening too far, the Pound Sterling to Swiss Franc (GBP/CHF) exchange rate has been unable to recover from near its worst levels.
Since opening this week at the level of 1.1945, GBP/CHF has seen further notable losses due to a combination of Brexit fears and safe haven demand.
In the middle of the week, GBP/CHF touched on a low of 1.1793. This marked a new post-EU referendum worst level for GBP/CHF, and the worst level for the pair since a sharp spike lower in 2011.
GBP/CHF continued to trend just above those lows at the time of writing on Friday, but as this morning’s weaker than expected UK data sets in the British currency could fall even lower.
Pound (GBP) Exchange Rates Remain Under Pressure Ahead of UK Growth Report
As of Friday morning, the Pound (GBP) was on track to see notable losses throughout the week.
Investors sold the British currency on rising fears that UK Parliament would not be able to avoid a no-deal Brexit.
There is also rising speculation that even if Parliament defeats the Boris Johnson government with a vote of no-confidence next month, it would simply push a general election until after the no-deal Brexit outcome has already taken place.
Brexit and UK political uncertainties are dominating the Pound outlook, but today’s data only left the British currency even less appealing.
Britain’s Q2 Gross Domestic Product (GDP) growth rate unexpectedly contracted at -0.2% quarter-on-quarter, with the yearly figure slowing to 1.2%.
Industrial and manufacturing production stats were also poor, leaving the British currency performing poorly towards the end of the week.
Swiss Franc (CHF) Exchange Rates near Best Levels despite Unsurprising Job Stats and SNB Speculation
The Swiss Franc (CHF) has been one of this week’s most appealing major currencies.
As a safe haven currency, it is typically appealing in times of global market uncertainty. This has left it gaining strongly from the latest resurgence of US-China trade war and currency war fears over the past week.
This has been the primary cause of Franc gains this week, and the Franc has been able to hold relatively closely to its best levels versus Sterling despite Swiss National Bank (SNB) jitters.
The SNB has indicated it plans to intervene in the Swiss Franc’s value to prevent it from climbing too high, which has limited its appeal as a safe haven.
This morning’s Swiss unemployment rate from July had little notable impact on CHF movement. Swiss unemployment remained at 2.1% as forecast.
Pound to Swiss Franc (GBP/CHF) Exchange Rate Remains Focused on Geopolitics
The Pound to Swiss Franc (GBP/CHF) exchange rate may struggle to recover from its recent losses unless investors find a reason to sell safe haven currencies like the Franc.
As the UK political and economic outlooks worsen, investors will have no reason to buy the Pound unless there is some kind of optimistic development on Brexit.
Any signs that the Boris Johnson government is more likely to attempt a softer stance on Brexit would bolster Pound demand, but without that the Pound’s potential for gains will be limited.
Next week’s economic calendar will be very busy in terms of UK data.
Job market data will be published on Tuesday, followed by inflation on Wednesday and retail sales on Thursday. If these stats shows resilience they could support the Pound and prevent it from falling too much lower.
Investors will be hesitant to buy the Swiss Franc much more either, amid concerns over how much the Swiss National Bank (SNB) will intervene in forex markets.
Still, if US-China trade tensions continue to worsen, safe haven currencies like the Franc will remain appealing and will keep even more pressure on the Pound to Swiss Franc (GBP/CHF) exchange rate.