After fluctuating in response to Brexit related news for the first half of the week, Pound Sterling (GBP) exchange rates experienced volatility following the publication of the UK’s Q3 GDP data on Thursday.
While the GBP CHF exchange rate initially gained in response to the UK’s growth news, the Pound reversed gains and edged lower against most of its peers as the European session progressed.
The Swiss Franc has largely been standing firm, although unstable gold prices have been restraining the upper limit of any gains for the ‘Swissie’.
Last week, the Pound advanced from 1.20 to 1.21 against the Swiss Franc.
Dramatic Fluctuations Seen for the Pound after Forecast-Beating GDP Results
The Pound’s latest movements against the Swiss Franc have been notably erratic, with the UK currency jumping on the back of GDP data before swiftly falling once more.
The high-impact GDP growth stats for Q3 offered the clearest picture yet of how the decision to Brexit has affected the UK economy, as they covered the first quarter solely consisting of post-Referendum months.
The annual growth rate was estimated to have risen against forecasts of a decline, while the quarterly drop was smaller than expected.
In the wake of the news, economists turned their attention to the Bank of England (BoE) and speculated on whether the central bank would adjust its policies in light of this.
Swiss Franc Movement Middling on Gold Prices
While the Franc has been unstable against the Pound over the week, it has been middling against the US Dollar and dropped off against the Euro.
Given the limited run of Swiss domestic data out lately, the Franc has mainly been influenced by gold prices in October, which have been making gradual progress upwards after the over -$80 crash at the start of the month.
The week’s only notable Swiss announcements have included a speech from Swiss National Bank President Thomas Jordan, who stated that negative interest rates are likely to stay.
More recently, the UBS consumption indicator for September increased the Franc’s value by rising from 1.53 to 1.59, showing greater economic activity in the country.
GBP/CHF Exchange Rate Forecast
For the rest of this week and next, Pound Sterling/Swiss Franc exchange rate movement may occur as a result of Friday’s Swiss KOF leading indicators figure for October, as well as the coming Thursday’s Q4 Swiss consumer confidence result.
For the UK, November 3
rd
will see the BoE make its interest rate decision and decide whether to modify quantitative easing.
With Switzerland’s data, Friday’s leading indicators are forecast to rise, while consumer confidence is predicted to improve from -15 to -12.
For the BoE event, current expectations are for no interest rate change or QE shift, although the week’s earlier October PMI results could well shift the opinions of BoE officials on these key issues.