The Pound has experienced fairly significant fluctuations today, sliding ahead of the Bank of England’s (BoE) ‘Super Thursday’ announcements before rebounding as they proved less dovish than anticipated.
Meanwhile, the Swiss Franc has been a fairly safe bet overall recently, as while the cost of gold has remained fickle throughout the year, it has been reported that demand is nonetheless supportively high.
Pound Sterling Jumps as BoE Rate Cut Fears Prove Unfounded
Sterling recently managed to advance against the Franc slightly, with the British currency recording far greater gains elsewhere.
This represents a sharp reversal in the fortunes of the Pound, as it was trending narrowly against a bulk of its peers before the BoE announcements were made.
The most prominent concern had been that one or more Monetary Policy Committee (MPC) members might vote for an interest rate cut, which would certainly have sent the Pound tumbling due to the obvious dovishness of such a decision.
As it stood, all 9 members simply voted for no hike at present, while both the BoE’s minutes and Governor Mark Carney reiterated that a vote to leave the EU ‘could have material effects’ and that the EU Referendum campaign itself has served to naturally raise the already high levels of uncertainty among investors.
Swiss Franc Relatively Stable on Increasing Demand for Gold
The Franc has been making positive progress against its rivals of late, although not to the extent of the currently bullish Pound.
The source of support for the ‘Swissie’ has been the news that during Q1 of 2016, demand for a nationally important commodity, gold, has risen by 21%, a figure sourced from the World Gold Council.
The council theorised that due to global uncertainty about markets and interest rates, gold has been turned to as a safe haven.
Earlier in the week, the national unemployment rate fell from 3.6% to 3.5% and the annual inflation rate for April move closer to a positive range.
GBP/CHF Exchange Rate Forecast
For the remainder of the present week and the week to come, Pound Sterling/Swiss Franc exchange rate movement may occur as a result of tomorrow’s UK construction output results, the coming Tuesday’s UK inflation report and Wednesday’s UK claims, earnings and unemployment data.
Switzerland’s contributions to GBP/CHF movement are likely to consist solely of the coming Tuesday’s producer and import prices for April.
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