Swiss Franc Outlook: CHF To GBP, EUR And USD Exchange Rates Gain As Economic Reports Surprise, US Dollar Broadly Weaker

Published: 20 Oct 2017 21:24 Forex

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Swiss Franc Exchange Rate Recovers Losses after Trade Data, CHF/GBP, CHF/EUR, CHF/USD Climb

On Wednesday the Swiss Franc declined against both the Euro and US Dollar in response to an announcement from the Swiss National Bank (SNB). In a sign that the central bank’s decision to move borrowing costs further into negative territory wasn’t as effective as hoped, the SNB asserted that it intends to increase the amount of sight-deposit accounts subject to negative interest rates. The Franc immediately fell against all of its most-traded rivals and posted its biggest decline against the Euro for over two months.

The decision saw one locally-based industry expert remark; ‘The SNB is clearly attempting to make holding the Franc less desirable. I don’t think these moves will reverse the Franc strength. A small haircut pales in comparison to depreciation in the Euro or potentially worse if Greece defaults.’

However, the Swiss Franc was able to recover ground against the Pound (CHF/GBP), US Dollar (CHF/USD) and Euro (CHF/EUR) following the publication of the latest batch of Swiss trade figures. On a month-on-month basis, exports rose by 1.2% in March and Imports fell by -2.4% - resulting in a trade surplus of 2.52 billion Francs, up from a negatively revised surplus of 2.32 billion Francs. After the data was published the Swiss Franc to Pound exchange rate gained over 0.8% and the Swiss Franc to US Dollar exchange rate rallied by 0.5%.

A quick foreign exchange market summary before we bring you the rest of the report:

On Thursday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.855

At time of writing the pound to euro exchange rate is quoted at 1.17.

The pound conversion rate (against pound) is quoted at 1 GBP/GBP.

The pound conversion rate (against us dollar) is quoted at 1.263 USD/GBP.

Please note: the FX rates above, updated 28th Mar 2024, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.

CHF/GBP Surges as Retail Sales Flop

The Franc’s advance against the Pound was aided by the UK’s less-than-impressive retail sales data. Retail sales were shown to have fallen by -0.5% on the month in March, with February’s gain being negatively revised from 0.7% to 0.6%. As economists had expected a gain of 0.5%, the result pushed the Pound lower against almost all of its most traded currency counterparts.

One industry expert noted; ‘Even with continued falls in fuel and food prices, consumers are responding to current period of uncertainty by being just as careful about their own spending as they have been for the past few years.

The CHF/GBP exchange rate gained 1.4%

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CHF/USD Higher after US Data, CHF/EUR Rises

The Swiss Franc also gained on both the US Dollar and Euro over the course of the European session. The CHF/USD exchange rate extended gains after a run of US economic data came in below expected levels. US initial jobless/continuing claims figures, Markit Manufacturing PMI and US New Home Sales numbers all fell short of forecasts, supporting the argument in favour of the Federal Reserve leaving interest rates on hold and triggering broad-based US Dollar losses. The Euro, meanwhile, was still feeling the pressure following a string of sub-par Manufacturing/Services/Composite PMIs for the Eurozone

The CHF/GBP exchange rate was trading in the region of 0.6948

Next week the only Swiss data to be aware of is the KOF Leading Indictors measure. The gauge is expected to rise from 0.5 to 0.7. The following week may be more influential for the Franc, with the SVME Manufacturing PMI, Swiss Consumer Confidence Index, employment numbers and inflation data all due for publication. Any reports which hint at the direction the SNB may take with fiscal policy in the future will impact the Franc.

Before the weekend a final flurry of Swiss Franc movement could occur in response to a speech to be given by Swiss National Bank (SNB) chief Thomas Jordan.

Developments in Europe may also impact the Swiss Franc.

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