Over the past week, the Pound Sterling to Swiss Franc (GBP/CHF) exchange rate was trending within the range of 1.4808 to 1.5095.
With trader risk-appetite improving amid confidence that the odds of a Grexit are now slim-to-none, the Swiss Franc declined versus many of its rivals over the past week. In addition, crashing gold prices also weighed on demand for the ‘Swissie’ (CHF). The losses were relatively short-lived however after China’s equity market crash heightened investor demand for safe-haven assets. That being said, once it became clear that Beijing intends to intervene in the market trader risk sentiment improved once again which caused the Franc to reverse gains. A softer Swiss asset is positive for the Swiss National Bank (SNB) amid a long struggle with overvaluation following the Franc’s surge in response to the shock Euro cap removal in January.
The Pound also fluctuated over the past week as traders speculate as to the timing of a Bank of England (BoE) rate hike. Fuelling the fluctuations has been mixed domestic data results and divergent sentiment from BoE policymakers. A general lean towards appreciation can be linked to growth data meeting with estimates in the second-quarter.
The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate advanced by around 0.5% during Wednesday’s European session.
On Wednesday the Franc softened versus many of its currency rivals despite a slowdown in China’s economy fuelling trader risk aversion. The depreciation can be linked to tanking gold prices amid speculation of a hawkish Federal Open Market Committee (FOMC). Should Federal Reserve policymakers hint towards a near-term benchmark interest rate hike, gold prices are likely to continue trending lower.
The Pound advanced versus most of its currency rivals during Wednesday’s European session. This was due to domestic data bettering estimates. June’s Net Consumer Credit, Net Lending Securities on Dwellings and Mortgage Approvals all bettered the respective median market forecast figures. The Pound’s appreciation was somewhat sluggish, however, after data revealed that British investment into non-financial businesses dropped to the lowest level since records began in 2011.
The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate dropped to a low of 1.4990 during Wednesday’s European session.
Looking ahead, Swiss Franc movement will be driven by market sentiment and gold prices. Should the FOMC have a dovish outlook, gold is likely to rise which will cause the ‘Swissie’ to gain. Additionally, if China’s economic situation takes a turn for the worse, dampened market sentiment will see heightened demand for the Franc thanks to its safe-haven qualities.
Meanwhile, BoE interest rate hike expectations are likely to remain a key driver of GBP movement. If the Federal Reserve adopts a hawkish stance, the Bank of England (BoE) may soon follow suit and cause a significant Sterling uptrend in the process.
The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate climbed to a high of 1.5099 during Wednesday’s European session.