The Pound (GBP) to Swiss Franc (CHF) exchange rate has gained around 450 pips so far this week, hitting a three-month-high after lowered ‘Brexit’ bets and strong UK data sent GBP/CHF soaring to levels around 1.4470.
Pound (GBP) Bullish Due to Decreasing Chances of ‘Brexit’
Wednesday and Thursday saw the Pound rallying due to newfound optimism that the UK would vote to remain with the European Union in June’s upcoming EU Referendum.
New poll results released by Ipsos MORI revealed that among those asked, the ‘Remain’ campaign had a strong 18-point lead of 55%, over 37% who voted for a ‘Brexit’.
This marked the second poll this week that indicated the ‘Remain’ camp was strengthening, following The Telegraph’s ORB poll from Monday.
Betting company Betfair also indicated that the chances of the UK voting to stay in the EU in June were around 76%.
Strong UK Retail Sales Help Sterling to Extend its Rally
The Pound was briefly flat on Thursday morning as investors readjusted their positions ahead of the morning’s retail sales releases, but began to gain once more when the news released well above expectations.
Monthly retail sales were expected to increase from -0.7% to 0.7% in April, but instead more than doubled the forecast by scoring 1.5%. The yearly score also beat out forecasts of slowing to 2.0% by leaping from 2.6% to 4.2%.
The print that includes auto fuel figures increased from -0.5% to 1.3% month-on-month, and from 3.0% to 4.3% year-on-year.
Swiss Franc (CHF) Remains Sturdy as Risk-Sentiment Drops
The ‘safe-haven’ Franc may have lost out considerably to the Pound’s bullishness, but generally performed quite solidly this week after a strengthening US Dollar led to risk-off market movements.
The Federal Reserve indicated that a rate hike in June was still possible, strengthening demand for safer currencies. Higher-than-expected US crude oil reserves also dented risk-sentiment.
Optimistic data released on Tuesday may also have kept the ‘Swissy’ sturdy against the Pound. Producer and import prices climbed from 0.0% to 0.3% month-on-month, beating estimates of 0.1%.
The yearly print, on the other hand, revealed a smaller-than-expected contraction of -2.4%, despite projections that it would merely narrow from 4.7% to 4.5%.
GBP/CHF Exchange Rate Forecast
The Pound to Swiss Franc is unlikely to experience considerable movement shifts or fluctuations before the end of the week, with only relatively light UK CBI trends data due for release on Friday.
Next week’s session will be relatively quiet for British news, but Thursday will see the release of Q1’s preliminary Gross Domestic Product.
Tuesday will see the release of Switzerland’s April trade balance, while Wednesday follows up with the UBS consumption indicator report.