Over the past week, the Pound Sterling to Swiss Franc (GBP/CHF) exchange rate advanced from a low of 1.3821 to a high of 1.4577.
With a complete absence of significant Swiss economic data over the past week, the GBP/CHF exchange rate has seen volatility thanks to developments in the UK. The Pound rallied versus the ‘Swissie’ (CHF) in response to a majority victory for the Conservatives in the British general election. This was well received by traders who see banks and businesses benefitting from the Tory economic model. However, the prospect of an earlier-than-expected referendum on the UK’s membership in the European Union saw the Sterling gains hit something of a ceiling. That being said, the Franc also softened on Monday after Swiss National Bank (SNB) Sight Deposits fell in the week ending May 8th.
Wednesday has seen the Pound Sterling to Swiss Franc (GBP/CHF) exchange rate strengthen as traders await the Bank of England (BoE) Inflation Report. As the first opportunity for the central bank to present the policy outlook under a Conservative government, traders have given extra weight to the report in terms of its significance to Sterling movement. The early Sterling gains on Wednesday can be attributed to positive British labour market data. Claimant Count Change, Unemployment Rate and Average Earnings all bettered median market forecast figures. The Pound Sterling to Swiss Franc exchange rate advance has been somewhat sluggish, however, as rising crude prices support demand for the Swiss asset.
For the remainder of the week, the Pound Sterling to Swiss Franc exchange rate will be fluctuating in response to developments in the UK thanks to a distinct lack of Swiss economic data. Friday’s Swiss Producer and Imports Prices data is unlikely to have a significant impact on GBP/CHF volatility. British data, conversely, could well be impactful. Friday’s Construction Output data will be of interest as it will show whether the construction sector can match growth in services and industrial output. Much of the GBP/CHF movement for the remainder of the week will be dictated by British political news and negotiations regarding Britain’s membership in the EU.
Looking ahead to next week, a greater number of Swiss data publications ought to see heightened GBP/CHF movement. Monday’s Retail Sales and Wednesday’s ZEW Economic Sentiment Index will be of interest to those invested in the ‘Swissie’. In terms of British data, Tuesday’s inflation data will be of significance. Additionally, Wednesday will see the Bank of England publish minutes from the most recent Monetary Policy Committee (MPC) meeting.
The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate was trending in the region of 1.4574 on Wednesday morning.