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Pound to Swiss Franc Exchange Rate Steady as Swiss Government Warns of ‘Clearly Negative’ First Quarter

Swiss Franc Currency Forecast

GBP/CHF Exchange Rate Rangebound on Dovish Comments from Swiss Government

The Pound to Swiss Franc exchange rate held steady today, with the pairing currently fluctuating around 1.21fr.

The Swiss Franc held steady against Sterling today following this week’s news that the Swiss Government expects the economy to shrink in the first quarter of this year.

Ronald Indergand, head of short time economic analyses at the State Secretariat for Economic Affairs (SECO), said that the Swiss economic outlook will be ‘clearly negative in the first quarter’.

Indergand also added:

‘In the second quarter the bounce-back may be around the corner.’

In Swiss economic data, today saw the release of the ZEW Survey of Expectations for January, which beat forecasts at 43.2.

However, with the outlook for the Swiss economy largely uncertain, this failed to boost the CHF/GBP exchange rate.

Meanwhile, tensions between the European Union and Switzerland are running high after Bern and Brussels attempt to negotiate an institutional framework agreement.

As a result, some CHF investors are becoming increasingly concerned of further political and economic instability weakening morale in the Swiss economy going forward.

CHF investors will be monitoring the World Economic Forum meeting in Davos, Switzerland, today.

Any signs of further economic instability for the global economy, however, would boost demand for the safe-haven Swiss Franc.

Pound Rises as UK Covid-19 Infection Rates Continue to Fall

The Pound held steady against the Swiss Franc today as the UK’s daily Covid-19 infection rates continue to drop while vaccinations rise.

As a result, GBP investors are hopeful that, in the next few months, we could see the UK economy begin to reopen and recover as coronavirus vaccines continue to be rolled out.

Today also saw the property website, Zoopla, report that house prices had hit a four-year high while property listings were down by 12%.

Richard Donnel, an analyst at Zoopla, commented:

‘The strength of the market in 2020 has eroded the available number of homes for sale and this will mean continued upward pressure on house prices in the short term. The most affordable parts of the UK are recording the highest rate of price growth for 10 years up to 5.4% a year. We still expect house price growth to slow towards 1% by the end of the year.’

However, GBP investors are remaining cautious after the International Monetary Fund (IMF) downgraded to the outlook for the British economy this year.

GBP/CHF Outlook: Swiss Export Data in Focus

Swiss Franc investors will be looking ahead to tomorrow’s release of the latest Swiss Trade Balance data for December.

If Swiss exports increased last month, then we could see the Swiss Franc head higher.

Also, if risk sentiment continues to sour because of rising global Covid-19 cases, we will see demand for the safe-haven Swiss Franc increase.

Pound investors will continue to monitor the UK’s Covid-19 situation over the course of this week.

If the UK Government’s Covid-19 vaccination programme appears to be on target, then we could see Sterling rise.

However, any indications that the UK lockdown could be extended would be GBP-negative.