The Pound has fallen slightly against the Swiss Franc, remaining in the doldrums as Brexit talks continue.
Sterling Slips as UK and EU Citizens become Brexit Debate Focus
The Pound dipped against the Swiss Franc today as a series of conflicting Bank of England (BoE) statements left GBP in flux.
Sterling advanced strongly against the Franc on June 21 st when BoE official Andy Haldane surprisingly talked up a UK interest rate hike.
As Haldane has historically been opposed to rate hikes, this raised hopes that 2017 could bring the first UK interest rate increase since 2007. These comments also directly contradicted those made by BoE Governor Mark Carney earlier in the week.
GBP reversed these gains today however owing to ongoing Brexit talks. The latest subject for discussion has been UK citizens in the EU and vice versa.
This is a tense issue and comes into focus in the context of a possible shortage in EU seasonal workers to pick UK fruits.
The Franc’s gains against the Pound come after Switzerland’s trade balance results for May were announced. This showed a rise from 1.96bn to 3.4bn, exceeding forecasts of 2.44bn.
In other Swiss news, the cost of gold has spiked up after a period of steady decline, also pushing up the CHF GBP exchange rate.
The last significant data this week will come from Switzerland on Friday.
This will be the KOF Institute summer economic forecast, which gives an outlook on how the economy may be faring. If the KOF release is especially optimistic the CHF GBP exchange rate could firm before the weekend.
Looking further ahead, next week’s main UK news is due on Tuesday and Friday. The earlier contribution will be the Confederation of British Industry (CBI) reported retail sales figure, which could shed light on UK real incomes.
If the index falls, it may reinforce the notion that UK consumers are suffering from a wage squeeze. With inflation exceeding the level of wage growth, lower incomes mean less spending on non-essentials. A declining figure may weaken the Pound considerably, as it could confirm the worst fears of economists and Bank of England (BoE) officials.
The other big news on Friday will be the UK’s Q1 GDP figures and business investment stats.