Forecast-Beating UK Industrial Stats Push GBP/CHF Exchange Rate Up
The Pound (GBP) tumbled against the Swiss Franc (CHF) earlier this week but has since made a recovery by rising by 0.4% in the GBP/CHF pairing.
This Pound Sterling advance follows the news that UK industrial orders rose by much more than expected in June.
The Confederation of British Industry’s (CBI) industrial orders stats showed a rise from -3 points to 13, greatly exceeding the expected 1 point reading.
Commenting on the data, CBI Head of Economic Intelligence Anna Leach said:
‘The recovery in orders and a return to bumper growth in production suggests the lull in manufacturing activity may be over.’
Swiss Franc to Pound Sterling (CHF/GBP) Exchange Rate Drops on Trade Warning
The Swiss Franc (CHF) has been in low demand today, falling against the Pound (GBP) and other currency peers like the Euro and US Dollar.
This decline in CHF exchange rates has been caused by warnings about possible disruption to future trading with Switzerland.
A report from the State Secretariat for Economic Affairs (SECO) has forecast that US tariffs levelled against the EU could ultimately harm the Swiss economy:
‘The trade dispute between the US and key trade partners has escalated to new heights after the implementation of tariffs on steel and aluminium imports.
‘If the situation were to deteriorate further and trigger a trade war between the major economic areas, this would significantly curb global trade, Swiss exports and, ultimately, economic growth in the medium term.’
Pound Sterling to Swiss Franc Exchange Rate Forecast: Will CHF Appreciate after SNB Meeting?
The Pound’s (GBP) recent advance against the Swiss Franc (CHF) could extend when Bank of England (BoE) policymakers meet at noon on Thursday.
Before this, however, there will also be a Swiss National Bank (SNB) policy meeting earlier in the morning.
Like BoE officials, the SNB’s policymakers are not expected to adjust interest rates, which currently sit at -0.75%.
Swiss interest rates are negative in an effort to devalue the ‘safe-haven’ CHF; any indication that policy normalisation could be coming might cause the Swiss Franc to appreciate.
Chance of Greater GBP/CHF Exchange Rate Gains on BoE Interest Rate Hike Hints
Given the low expectations for any UK interest rate adjustment, GBP traders will be focusing on the BoE’s minutes and a press conference by Governor Mark Carney on Thursday.
Both the minutes and Mr Carney could hint at a potential interest rate hike in the coming months; analysts have pencilled in August as the earliest possibility.
Mr Carney has previously suggested a move away from explicit forward guidance, but even vague hints might be enough to boost the GBP/CHF exchange rate after the meeting.