Improved Swiss data and an increase in market risk aversion strengthened the Swiss Franc exchange rates, while ‘Brexit’ uncertainty continued to weigh on the Pound.
The British pound has managed to retain gains against the Swiss Franc today, against investor over-activity.
The pound sterling has potentially appreciated against the Franc today due to residual positivity from the earlier retail sales stats.
The Franc has conversely been lowered in appeal by the sharp decline in the price of gold per 100 ounces.
Although safe-haven demand was boosted by the unexpectedly hawkish tone of the latest Fed minutes the British pound to Swiss franc exchange rate remained on an uptrend on Thursday.
Demand for the Pound continued to build after the UK’s April Retail Sales figures strongly bettered forecast, encouraging hopes that the domestic economy was in stronger shape.
A poll from IPSOS MORI indicated that support for the ‘Remain’ campaign has been gaining steam, at 55% to the ‘Leave’ vote’s 37%.
Consequently the Pound Sterling to Swiss Franc (GBP/CHF) exchange rate entered a bullish run, as a fresh wave of optimism gripped investors.
Some measure of confidence was raised in the Swiss economy by the latest Producer and Import Prices figures, which suggested that negative inflationary pressure had eased somewhat in April.
However, as safe-haven demand was eroded by the latest rally in commodity prices the Swiss Franc (CHF) was not able to particularly capitalise on this stronger showing.
Despite the UK’s April inflation data proving disappointing the Pound Sterling to Swiss Franc (GBP/CHF) exchange rate thus did not remain on a downtrend for long.
Before we continue with the news, here are today’s live fx rates your reference:
On Saturday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
FX markets see the pound vs pound exchange rate converting at 1.
FX markets see the pound vs euro exchange rate converting at 1.168.
At time of writing the pound to us dollar exchange rate is quoted at 1.249.
NB: the forex rates mentioned above, revised as of 27th Apr 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
The weaker-than-expected UK Consumer Price Index indicated that inflation had fallen back on the year from 0.5% to 0.3%, a result that was largely blamed on uncertainty linked to the EU membership referendum.
While this bearish result did not particularly weigh on Pound Sterling on Tuesday, in part due to optimism generated by the latest ICM phone poll, the domestic inflationary outlook remains muted.
Concerns over the June referendum are also likely to remain a predominant drag on the GBP exchange rate, particularly with signs continuing to point towards a ‘Brexit’ causing significant volatility as Greenwich Associates noted that:
‘1) Companies in the U.K. and continental Europe see Brexit as a real possibility, and 2) Given companies’ deep levels of integration across the two markets, corporate treasury officials think a U.K. exit would have a significant impact on their own businesses and overall trade. In light of this, it is surprising to find that few executives have put in place security measures to protect their companies from the expected volatility.’
Stronger UK Weekly Earning Failed to Bolster GBP to CHF Exchange Rate
Investors were not overly enthused to find that the UK’s average weekly earnings in the three months to March had unexpectedly strengthened.
Although jobless claims also fell this was outweighed by the fact that domestic wage growth was not universally positive, raising further worries that the economy is in less than robust health.
With the Bank of England (BoE) looking increasingly unlikely to raise interest rates before the end of the year, even in the event of the country voting to remain within the EU, markets have been less inclined to favour Sterling.
Swiss Franc (CHF) Exchange Rates Shored up by Bets on June Fed Rate Hike
As there is no further Swiss data set for release ahead of the weekend movement of the Franc, meanwhile, remains primarily tied to general market sentiment.
Particularly hawkish commentary from Atlanta Fed President Dennis Lockhart, who indicated that the probability of a June interest rate hike is likely underestimated, saw the US Dollar (USD) strengthen significantly on Wednesday.
The sharply increased odds of an imminent Fed rate hike saw investors piling back into lower-risk assets such as gold and the Swiss Franc, with continued bullish US data likely to maintain this atmosphere of risk aversion.