Pound Sterling to Swiss Franc (GBP/CHF) Exchange Rate Rises on Mark Carney’s Optimistic Comments

BoE Governor Mark Carney’s Speech Boosts GBP/CHF on August Rate Hike Hopes

The Pound (GBP) has made a moderate advance against the Swiss Franc (CHF) today, following remarks from Bank of England (BoE) Governor Mark Carney.

Mr Carney raised hopes for a BoE interest rate hike in 2018 when he stated that the UK’s poor Q1 performance was likely down to the weather, rather than any economic weakness.

GBP/CHF Exchange Rate Gains Limited by Hard Brexit Job Loss Warning

Today’s Pound to Swiss Franc (GBP/CHF) exchange rate rise has been limited by the latest Brexit news, which has had a generally negative influence on Pound Sterling.

The main focus has been on potential job losses if Brexit goes badly for the UK, ending in there being no deal with the EU.

Jaguar Land Rover CEO Ralf Speth has highlighted the potential damage such an exit could cause, saying:

‘If I’m forced to go out because we don’t have the right deal, then we have to close plants here in the UK and it will be very, very sad.’

Swiss Franc to Pound (CHF/GBP) Exchange Rate Slides on Inflation Rate Disappointment

The Swiss Franc (CHF) has made steady losses against the Pound (GBP) this week, falling near a two-week low today.

The latest decline in CHF demand has been caused by June’s inflation rate figures, which have shown annual rates rose from 1% to 1.1% but month-on-month price growth slowed.

The monthly reading slowed from 0.4% in May to a static 0% print for June; this result just managed to beat forecasts for a -0.1% reading.

The Swiss National Bank (SNB) has an inflation target of just under 2%, so these results show that there is still a long way to go before the target is met.

GBP/CHF Forecast: Will Rising Swiss Unemployment Push Pound to Swiss Franc Exchange Rate Higher?

This week’s main UK and Swiss economic data is already out, but the Pound could still make an early advance in the GBP/CHF exchange rate next week on Swiss jobs data.

Switzerland’s unemployment rate measure for June will come out on Monday and is forecast to rise from 2.4% to 2.6%.

This result would still leave Switzerland with an enviably low level of unemployment, at the cost of breaking four consecutive months of falling unemployment rates.

As such, the GBP/CHF exchange rate could rise if the Swiss jobless rate grows, on reduced CHF trader confidence.

Any potential Pound gains could be extended by Tuesday’s UK output data, covering manufacturing, industrial and construction productivity.

Higher levels of monthly and annual output in May could boost the Pound, causing GBP/CHF exchange rate gains.

Adam Solomon

Adam joined the team at TorFX soon after graduating from University in 2005 with a degree in Journalism. Since then Adam has advanced to become both Head of Trading and Head of Treasury. His keen interest in the currency market and knowledge of what drives exchange rates makes him perfectly positioned to produce regular market updates focused on the movements of the major currencies.

Contact Adam Solomon