The Swiss Franc remained lower against the Pound on Tuesday after disappointing data releases on Monday. The Swiss SVME Manufacturing Purchasing Managers Index (PMI) failed to record any growth in April, instead remaining at 47.9. Switzerland’s manufacturing sector has now registered four months of contraction as the unruly Swiss currency continues to trend higher after the Swiss National Bank (SNB) announced it was removing the cap between the Euro and the Franc (EUR/CHF) at the start of the year.
Despite the Swiss manufacturing industry contracting for four consecutive months, experts suggest that the nation should be able to avoid recession. The report read: ‘Although such a PMI value points towards decreasing industrial activity, an overall economic recession is unlikely.’ Economists had expected some growth in April, with forecasts suggesting an increase to 48.2. However, as a result of the index, the Swiss Franc declined against other majors in Monday’s European session and continued to trend lower in Asian trading.
Swiss data is thin on the ground on Tuesday and Wednesday leaving a lot of investor sentiment reliant on global macroeconomic developments. However, Thursday could spice up Swiss Franc trading with the release of the Swiss SECO Consumer Confidence ecostat. Forecasts for the sentiment index are rather dismal, with economists suggesting a decline from -6 to -11 is possible. Additionally, Swiss Foreign Currency Reserves data will also be out on Thursday and could mildly influence Swiss Franc trading.
Friday’s scheduled to be the most exciting day for Swiss Franc trading with Swiss Unemployment Rate numbers due to emerge. If the Swiss economy records a seasonally adjusted decline in joblessness from 3.3% to 3.2% as expected, the Franc could rally. However, the day will continue to place pressure on the Swiss currency with the nation’s Consumer Price Index (CPI) due for release. The current forecast suggests April will continue to stagnate at -0.9% on the year.
Swiss National Bank President Thomas Jordan will also be speaking on Friday and could attempt to jawbone the Franc as the central bank would prefer a weaker currency. The SNB posted a massive 30 billion Swiss Franc loss in the first quarter of 2015 as the strong Franc eroded the balance sheet. The SNB stated: ‘The SNB’s financial result depends largely on developments in the gold, foreign exchange and capital markets. Strong fluctuations are therefore to be expected, and only provisional conclusions are possible as regards the annual result.
The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate is trading at 1.4126. The Euro to Swiss Franc (EUR/GBP) exchange rate is trending in the region of 1.0392.