Pound Sterling Swiss Franc Exchange Rate: GBP/CHF Drops after Barnier’s Brexit-Boost

GBP/CHF Exchange Rate Falls after Initial Burst of Brexit Optimism

Pound Sterling (GBP) has fallen against the Swiss Franc (CHF) today, hitting an interbank exchange rate of CHF1.2629.

This depreciation has come in the wake of some positive developments in the Brexit process – the GBP/CHF exchange rate was initially boosted by the news, but trader confidence has since diminished.

Sterling’s decline is partly down to profit-taking and concerns that an immediate Brexit breakthrough might not be forthcoming.

On the latter point, RBC economists have cautioned that despite speculation, talk of accelerated Brexit talks could prove premature:

‘Any deal is unlikely to see the EU make any material concessions, as [EU Chief Negotiator Michel] Barnier highlighted yesterday when he stressed the importance of the integrity of the single market.’

Lower Leading Indicator Fails to Prevent CHF/GBP Exchange Rate Gains Today

The Swiss Franc (CHF) has firmed against the Pound (GBP) today, although the latest Swiss economic news hasn’t been especially supportive.

The latest KOF leading indicator has shown a minor decline in August, dipping from 101.7 points to 100.3.

This reading serves as a broad health measure for the Swiss economy yet despite it declining demand for the Franc has remained high.

Pound Sterling to Swiss Franc Exchange Rate Forecast: Are GBP/CHF Losses ahead on UK Consumer Confidence Data?

The Pound (GBP) could make additional losses against the Swiss Franc (CHF) in the near-future, when a UK consumer confidence reading comes out on Friday morning.

This measurement of consumer sentiment in August, provided by GfK, is expected to show a still-negative reading of -10 points during the month.

If the confidence score prints as forecast or shows a larger negative reading then Pound Sterling could fall further against the Euro.

Beyond this data, Sterling could also be affected by any additional statements about Brexit – more signs of a breakthrough in the negotiating deadlock could ensure GBP/CHF exchange rate resilience.

CHF/GBP Outlook: Will Swiss Franc Rise against Pound Sterling on Strong Manufacturing Figures?

The next Swiss economic news to watch out for will come out next week, with Monday bringing retail sales data for July along with manufacturing figures for August.

Levels of Swiss retail sales are expected to reprint at 0.5% on the month and 0.3% on the year, but the Swiss Franc (CHF) could still rise against the Pound (GBP) if manufacturing activity grows.

The SVME manufacturing PMI is forecast to rise from 61.9 points to 62.2; any reading above 50 points indicates growth so this would indicate increasing manufacturing sector strength.

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