Pound Sterling to Swiss Franc (GBP/CHF) Exchange Rate Traders await Safe Haven Signals

Pound to Swiss Franc (GBP/CHF) Exchange Rate Steady as Swiss Inflation Meets Expectations

Investors were largely steady on the Pound Sterling to Swiss Franc (GBP/CHF) exchange rate in recent sessions, as Pound (GBP) investors anticipated Brexit developments while Swiss Franc (CHF) traders awaited shifts in risk-sentiment.

Due to rising market demand for safe haven currencies like the Swiss Franc last week, GBP/CHF tumbled lower and closed the week near the interbank level of SFr1.29.

Since markets opened this week, GBP/CHF hasn’t moved far from those levels as investors await bigger political news.

As Switzerland’s latest inflation rate stats met expectations and investors awaited upcoming US-China trade developments, markets were hesitant to move too much on the Swiss Franc.

Pound (GBP) Exchange Rates Struggle to Advance as UK Growth Falls Short

Despite some hopes that the UK government’s Brexit plan could be negotiated to be made more popular domestically, the Pound (GBP) was unable to benefit on Monday as the latest data fell short of expectations.

Concerns that growth was slower than forecast weighed on Sterling’s potential for gains when markets opened, and the Pound became unappealing when the latest growth figures were disappointing.

December’s growth figures were forecast to come in at 0.0% month-on-month and 1.4% year-on-year, but printed at -0.4% and 1.0% respectively.

The Q4 growth results were disappointing too, unexpectedly slowing to 1.3% year-on-year. What’s more, the day’s manufacturing and industrial production stats all contracted as Brexit fears impacted economic activity.

As a result of the slew of disappointing UK data, the Pound was unable to benefit from hopes that the government may be able to find common ground with the opposition Labour Party to make the Brexit deal more appealing.

Swiss Franc (CHF) Exchange Rates Steady as US-China Negotiations Resume

The Swiss Franc (CHF) steadied this morning, with investors hesitant to change their positions on the safe haven currency following last week’s risk-off movement.

Investors piled into safe havens as US President Donald Trump indicated that he would not meet with China President Xi Jinping again before a March deadline for US-China talks.

While negotiators remain optimistic, the Swiss Franc continued to be resilient today as talks were set to resume and investors anticipated potential developments.

Switzerland’s January inflation rate results were published this morning, but had little impact on the Swiss Franc as the data met expectations.

Inflation printed at -0.3% month-on-month which, while expected, likely limited demand for the Franc a little.

Pound to Swiss Franc (GBP/CHF) Exchange Rate Investors Await Political Developments

The biggest focus for Pound (GBP) investors in the coming week will be potential Brexit developments, while Swiss Franc (CHF) traders will be focused on US-China trade negotiations.

The UK government’s Brexit plan is set to be debated in Parliament again in the middle of the month, meaning if the government is not able to acquire any concessions in Brexit talks this week the deal may fail to make any progress any time soon.

The clock is ticking, with under 50 days until Brexit occurs.

Any signs that the EU could offer concessions or that the government could reach some kind of compromise with opposing Parties domestically would make the Pound more appealing.

The Swiss Franc will be driven by US-China trade developments. If negotiations are perceived as going poorly, the safe haven Swiss Franc will be more appealing.

Upcoming UK data, such as inflation on Wednesday and retail sales on Friday, are unlikely to be as influential for the Pound to Swiss Franc (GBP/CHF) exchange rate as political news could be.

Josh Jeffery

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