GBP/CHF Exchange Rate Edges Higher as Outlook Darkens for Swiss Economy
The Pound to Swiss Franc (GBP/CHF) exchange rate rose by 0.2% today, with the pairing currently fluctuating around 1.189fr.
The Swiss Franc (CHF) fell today owing to a stronger US Dollar (USD) ahead of the US presidential elections.
As a result, the Swiss Franc (CHF) has suffered from its negative correlation to the US currency, sending the CHF/GBP exchange rate downward today.
In Swiss economic data, today saw the release of the Consumer Price Index for October, which fell by -0.6 year-on-year, while the month-on-month figure held at 0%.
Consequently, Swiss Franc (CHF) investors are becoming more concerned for the nation’s economy, which could be set for a downturn in GDP in the fourth quarter.
Additionally, Switzerland’s report of nearly 22,000 new Covid-19 cases over the weekend has darkened the outlook for the nation’s economic recovery in the fourth quarter.
Analysts at Reuters commented:
‘Total confirmed cases in Switzerland and tiny neighbouring principality Liechtenstein increased to 176,177 and the death toll rose by 93 to 2,130, while hospitalisations swelled by nearly 500, keeping the pressure on the country’s intensive care icumonitoring.ch network.’
Pound (GBP) Edges Higher Despite Growing Concerns for UK Economy
The Pound (GBP) rose against the weaker Swiss Franc today despite concerns for Britain’s economy as it enters its second national lockdown this week.
Jari Stehn, a leader of Goldman Sachs’ analysts said that the outlook for the UK economy had ‘deteriorated sharply’ and was pessimistic about the outlook in the months ahead.
Analysts at Goldman Sachs concluded:
‘Looking ahead, we assume that the new restrictions will last for three months before they are gradually rolled back starting in February.’
Meanwhile, Brexit concerns are holding back some of Sterling’s gains, with still no signs of progress in UK-EU trade talks.
However, any signs of a breakthrough in trade talks – and a heightened possibility of a post-Brexit trade deal – would be GBP-positive.
GBP/CHF Forecast: UK Lockdown to Drag Down Sterling
Pound (GBP) investors will be awaiting tomorrow’s release of October’s UK Services PMI. Any improvement in the UK’s largest sector could boost the GBP/CHF exchange rate.
Swiss Franc (CHF) traders will be monitoring global risk sentiment and the US elections tomorrow.
If the US presidential election throws up any uncertainties, then demand for safe-haven currencies like the Swiss Franc (CHF) would soar.
The GBP/CHF exchange rate will likely become subdued this week, however, as Britain heads into its second national lockdown as of from Thursday.
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