Pound Sterling Swiss Franc (GBP/CHF) Exchange Rate Flat as UK Services PMI Escapes Contraction

Pound Swiss Franc (GBP/CHF) Exchange Rate Rises despite UK Services Employment Falling at Fastest Pace Since 2011

The Pound Sterling Swiss Franc (GBP/CHF) exchange rate rose this morning before slipping, and is currently trading at an inter-bank rate of 1.3121Fr.

The UK Services PMI showed that business activity had picked up in February, pushing the PMI to 51.3, despite the forecast suggesting the sector would fall below the 50 mark.

However, the data did show that employment fell at its fastest pace since November 2011 due to a lack of new work, which was creating a more cautious stance when it came to hiring new staff.

Commenting on the data, Chris Williamson, Chief Business Economist at IHS Markit said:

‘Worse may be to come when pre-Brexit preparatory activities move into reverse. Many Brexit-related headwinds and uncertainties also look set to linger in coming months even in the case of PM May’s deal going through. Global economic growth meanwhile remains sluggish, adding an increasingly gloomy backdrop to the UK’s current problems.

‘Business optimism about the year ahead has consequently sunk to the lowest ever recorded by the survey with the exceptions of the height of the global financial crisis and July 2016. Brexit concerns dominate the list of reasons cited by companies for deteriorating business performance by a wide margin.’

Swiss Franc (CHF) Slips despite Highest Monthly Inflation in Nine Months

The Pound Swiss Franc (GBP/CHF) exchange rate continued to rise this morning following the release of the Swiss Consumer Price Index data.

February’s year-on-year CPI figure performed as forecast and clocked in at 0.6%.

Inflation hit 0.4% in February compared to the previous month, which was the highest monthly increase since May 2018.

However, this did little to stop the Franc from slipping against Sterling over the course of the morning.

Sterling (GBP) Rises despite Brexit-Fuelled Slowdown in UK Retail Sales

The release of the like-for-like retail sales did little to weigh on Sterling (GBP) as the British currency rose against the Swiss Franc (CHF) earlier in the session.

Data showed that Brexit uncertainty dampened retail growth, as sales dipped by a lower-than-forecast -0.1% in February.

The data published by the British Retail Consortium (BRC) found that:

‘On a total basis, sales increased by 0.5% in February, against an increase of 1.6% in February 2018. This was below the 3-month and 12-month averages of 0.9% and 1.2% respectively.’

Commenting on the data, UK Head of Retail at KPMG, Paul Martin said:

‘Following a modest recovery in January, February saw a slowdown in sales. While consumer spending has so far remained relatively resilient, driven by factors such as low unemployment and wage growth, it would seem that continuing political and economic uncertainties are beginning to notably affect shoppers’ spending habits.

‘Across all categories there was sluggish growth, and the milder weather appears to have shifted the focus away from indoors with furniture sales declining – and not even Valentine’s Day could boost sales in the stationery category.’

Pound Swiss Franc Outlook: Will the GBP/CHF Exchange Rate Rise on a Hawkish Carney?

Looking ahead to this afternoon, the Pound (GBP) could rise against the Swiss Franc (CHF) following a speech from Mark Carney, Governor of the Bank of England (BoE).

If Carney’s tone is hawkish and his outlook on the post-Brexit economy is optimistic, it could buoy Sterling.

There could be some movement in the pairing on Thursday following the release of the Swiss unemployment figure.

February’s seasonally adjusted unemployment figure is forecast to remain steady at 2.4%, which may cause the Pound Swiss Franc (GBP/CHF) exchange rate to slip.

Millie Empson

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