The current week has seen the Pound Sterling to Swiss Franc (GBP/CHF) exchange rate steadily decline to 1.4943 today, although a weekly high of 1.5107 was reached on Tuesday morning after the Swiss Exports and Imports figures for August both printed in the negative.
So far, the Pound has been most heavily affected by the release of the UK Public Finances and Public Sector Net Borrowing figures for August, which came out on Tuesday. While no predictions had been made for the former field, a slight positive was recorded by showing a -£0.2bn reduction in the amount financed to UK government. Unfortunately, this small cause for optimism was overshadowed greatly by the results of the PSNB publications. The base variant has been predicted to show an increase of from -£0.1bn to £8.8bn but instead showed an increase to £11.3bn, while the figure Excluding Banking Groups came in at £12.1bn instead of £9.2bn.
This news sent Sterling into a sharp decline against the Franc and a number of its competitors; although the Swiss Import/Export figures were negative, the situation for Sterling in the exchange rate wasn’t helped by the Swiss Balance of Trade falling to a better number than had been expected.
Also yesterday, Crédit Agricole (CA) offered their opinions on the Swiss Franc, although thankfully for the Pound, the banking group predicted a loss of value for the Franc in the near future. This was due to a theory that the Swiss National Bank (SNB) is keeping the threat of intervention active. As they didn’t interfere with Switzerland’s negative interest rates last week, CA stated: ‘the latest development suggests that the SNB will continue to keep any currency upside limited. As such, the currency is likely to keep on losing safe-haven appeal’.
Today, the most marginal of rises in the price of gold per 100 ounces has added to the Franc’s positive faring against the Pound.
For the remainder of the week, Pound Sterling/Swiss Franc exchange rate movement may occur as a result of the Swiss National Bank’s Quarterly Bulletin and the UK BBA Loans for House Purchases in August, out tomorrow. Both the Pound and the Franc have been found lacking in terms of national data releases this week and these last two results may not have the high-impact effect required to disrupt the current Sterling downtrend. The Swiss Bulletin will naturally prove disruptive to the Pound if the SNB express bullish sentiments with regard to the future of the Swiss economy. Closer to home, the UK Loans data has been forecast to come in positively with a rise from 46033 to 47000 being predicted.