The Pound Swiss Franc (GBP CHF) exchange rate continues rising as investors speculate over the possibility of a UK-US trade deal.
Potential US Trade Agreement Prompts Pound Swiss Franc (GBP CHF) Rise
The Pound surged against the Swiss Franc today as Prime Minister Theresa May prepares to meet the new US President, Donald Trump, at the White House on Friday.
Markets are hopeful that the meeting could be the first step in the creation of new trade agreement between the two nations as Trump has previously expressed his willingness to form a partnership with Britain post-Brexit. As Prof Ted Malloch of Henley Business School explained;
‘There won’t be a deal signed in the White House on Friday, but there could be an agreement for a framework going forward where people are empowered to have that kind of conversation behind closed doors.’
It will still be at least another two years before any deal can be signed however as the UK cannot form its own trade agreements until the government has negotiated its exit from the EU.
Sterling Weakens over GDP Concerns
Despite the Office for National Statistics (ONS) reporting better than expected GDP figures in the last quarter of 2016, the Pound saw a slight downturn as economists fear a slowdown in 2017.
The UK economy’s annual growth rate rose by 2.2% last year, beating expectations that it would only reach 2.1% and showing reliance despite the Brexit vote.
However, analysts expect this trend to come to an end this year as rising inflation and uncertainty over Brexit looks set to hamper growth, putting pressure on Sterling.
Pound Swiss Franc Forecast: Swiss Business Confidence Ahead
A lull in data for the remainder of the week is likely to cause traders to look towards next week for potential movement in the GBP CHF exchange rate, starting with Switzerland’s Business Confidence report on Monday.
Should confidence rise next week then it is highly likely that the Swiss France will also show some improvement.
Meanwhile, Tuesday will see the release of the UK’s latest Consumer Confidence report, which could cause the Pound to falter as experts predict that retailer price hikes will cause confidence to drop in January.
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