Pound to Swiss Franc Exchange Rate Outlook Mixed as Currencies Driven by Rivals
After spending most of August slipping lower, could the Pound Sterling to Swiss Franc (GBP/CHF) sustain a rebound this week? A jumping US Dollar (USD) is pushing the Swiss Franc (CHF) lower, but the Pound (GBP) outlook remains pressured.
GBP/CHF opened this week at the level of 1.1895. The pair briefly dipped to a low of 1.1859 at the beginning of the week, which was the pair’s worst level all month, before rebounding.
Last night, GBP/CHF even briefly touched on a high of 1.2024. This was the best GBP/CHF level in over two months, since early June.
While GBP/CHF has struggled to hold those highs it is still trending high in the region of 1.1963 at the time of writing on Thursday. If the pair is able to hold these gains until the end of the week it would mean the pair has essentially recovered its weekly losses.
Pound (GBP) Exchange Rates Avoiding Losses despite Gloomy Outlook
The Pound has been attempting rebound in recent weeks, but its ammo to mount a solid recovery has been highly limited.
This week’s UK inflation data has beaten forecasts. On top of this, some UK retailers have said that their performance has been strong due to higher online retail activity during the pandemic.
However, economists remain anxious about Britain’s outlook. Not only has there been no optimistic developments in UK-EU Brexit negotiations, but there are predictions that Britain’s economy won’t recover from its current downturn for years.
Swiss Franc (CHF) Exchange Rates Hit as US Dollar (USD) Rebounds
While the details of the report were not all that surprising, the Federal Reserve’s latest meeting minutes helped the US Dollar (USD) to rebound overnight.
As the US Dollar (USD) has struggled to capitalise on safe haven demand amid US economic concerns, it recovered some ground against other safe havens during this rebound.
As a result, the safe haven Swiss Franc has tumbled today as investors sell other safe havens in favour of the US Dollar.
Still, despite this week’s weaker performance, the Swiss Franc outlook remains fairly solid overall. According to Kamal Sharma and other Analysts at Bank of America (BofA):
‘Against the backdrop of an improving market landscape (declining financial stress, improving liquidity conditions), the currency has remained relatively resilient,’
Today’s Swiss industrial production report came in with a slightly lighter than expected contraction of -8.6%, which may have kept CHF from seeing bigger losses.
Pound to Swiss Franc (GBP/CHF) Exchange Rate Awaits Key Friday Data
Amid a lack of notable Brexit developments this week, the Pound to Swiss Franc (GBP/CHF) exchange rate could instead be influenced by tomorrow’s major UK ecostats.
Britain’s July retail sales results could offer the Pound some solid support if it indicates that Britain’s consumer activity is weathering the coronavirus pandemic.
Following this, UK PMI projections for August will give investors the clearest idea yet of how Britain’s economy is holding up this month.
Strong UK PMIs could bolster hopes for economic resilience in the UK outlook and leave the Pound more appealing.
Of course, any surprising developments in UK-EU Brexit negotiations or shifts in market risk-sentiment could also influence the Pound to Swiss Franc (GBP/CHF) exchange rate.
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