Since the start of the month, the Pound Sterling to Swiss Franc (GBP/CHF) exchange rate has been trending within the range of 1.4180 – 1.4441.
The Pound weakened against the Swiss Franc and other major peers on Tuesday after HSBC announced that it was planning on cutting 8,000 jobs in the UK. The news raised concerns over the UK economic recovery and heightened speculation that Europe’s biggest bank will choose to move its headquarters from London to Asia.
Also weighing on the British currency were worries over the nation’s credit rating. Moody’s said that if the UK does vote in favour of leaving the European Union it could face a downgrade. The credit rating agency said that an exit would leave the nation vulnerable. Also heightening fears over a Brexit was a report issued by recruitment firm Manpower which said that a British exit from the single currency bloc would make firms less willing to invest in jobs.
UK businesses are divided on the subject adding to the uncertainty. Employers’ body the CBI has said continued EU membership is in the UK’s national interest, while the British Chambers of Commerce has said 55% of its members are in favour of a ‘reformed Europe’. The leaders of JCB and Dyson, however, have both said that the UK will have nothing to fear from leaving the EU.
The Swiss Franc managed to advance against the softened Pound after domestic data showed that the unemployment rate in the alpine nation remained unchanged last month. According to the report released by the State Secretariat for Economic Affairs, unemployment held steady at a seasonally adjusted 3.3%. The figure matched economist expectations for the unemployment rate to remain unchanged.
Also published were May’s Swiss inflation figures. According to the Federal Statistics Office, consumer prices fell by -1.2% on an annual basis. The drop was more than the 1.1% fall seen in the previous months and showed that deflationary pressure persists. On a monthly basis, however, prices were shown to have risen by 0.2%, more than the 0.1% forecast by economists and an improvement on the -0.2% decline seen in April.
The cause for the increase was put down to higher oil, rents and car products.
Costs of food and beverages declined 1.2% from last year, while alcoholic beverages prices edged up 0.1%. At the same time, clothing and footwear prices dropped 0.6% and housing and energy prices slid 0.3%.
The Pound could regain some ground against the Swiss Franc later in the week if UK industrial and manufacturing production reports come in positively.
The Pound Sterling to Swiss Franc exchange rate was trading in the region of 1.4180