Slowing UK Retail Sales Keep GBP/CHF Exchange Rate Tight
The Pound (GBP) has traded in a narrow range against the Swiss Franc (CHF) today, with a balance of negative UK sales data and semi-supportive Brexit news limiting movement.
The bad news is that UK retail sales have fallen across the board in September, either by more than forecast or when growth had been predicted.
Summing up the results, Ian Gilmartin of Barclays Corporate Banking said:
‘It’s still tough out there for the UK’s retailers, so solid 3% growth compared with last September is welcome news, despite being slightly below expectations.’
Elsewhere, news has emerged that the Brexit transition period could be extended to increase the chances of securing a good deal when the UK parts ways with the EU.
Prime Minister Theresa May has stated that there could be an extension of the transition period, which has been criticised by pro-Brexit MPs but raised hopes for a workable Brexit deal at the end of the process.
Swiss Franc to Pound (CHF/GBP) Exchange Rate Movement Limited on Trade Balance Data
For Swiss Franc (CHF) traders, today’s main economic news has consisted of September’s reported trade balance – this has risen from CHF1.36bn to CHF1.45bn, missing the expected CHF2.1bn printing.
While a higher trade surplus is good news for Swiss exporters, the failure to match up with the expected result has limited CHF trader optimism so far today.
In other news, Switzerland has finally been pushed off the top spot on the World Economic Forum’s (WEF) competitiveness rankings by the United States.
Switzerland had previously maintained a 9-year winning streak on the WEF’s ranking, but has been relegated to fourth place behind Singapore and Germany on the latest tables.
Pound Sterling to Swiss Franc Exchange Rate Forecast: Will BoE Governor Carney Boost GBP/CHF Pairing?
This week’s last major economic news will come from the Bank of England (BoE), with Governor Mark Carney due to give a speech in New York on Friday.
The BoE has been in the spotlight this week after a UK inflation rate slowdown was reported on Wednesday.
The current concern is that with a slower pace of inflation being reported, there could be a reduced likelihood of a BoE interest rate hike in 2019.
Mr Carney could reassure GBP traders when he speaks on Friday, particularly if he backs higher interest rates in 2019.
Explicit support is unlikely, but even the implication of a rate hike next year could be enough to cause a sharp GBP/CHF exchange rate rise.