GBP/CHF Exchange Rate Rangebound as IMF Gloom Weighs on Swiss Economy
The Pound Swiss Franc (GBP/CHF) exchange rate is steady today and is currently trading around 1.3043fr on the inter-bank market.
The Swiss Franc (CHF) stabilised against the weakened Pound (GBP) following the publication of the year-on-year Swiss Consumer Price Index (CPI) figures for March, which came in above forecast at 0.7% against February’s 0.6%.
These were followed by the monthly CPI figures which also increased above expectation.
However, news from the International Monetary Fund (IMF) has continued to weigh on investors’ sentiment in the Swiss Franc, following a gloomy forecast that Switzerland could face a slowing of its economic growth in 2019 to 1.1%.
The IMF stated that this was due to a number of factors, saying:
‘The renewed prospect of global ‘low-for-long’ interest rates and the possibility of a resurgence in international economic and political risk could trigger safe haven pressures on the Swiss franc and push inflation into negative territory.’
Sterling, meanwhile, has weakened following last night’s ‘indicative votes’ which were once again rejected by the majority of MPs, leaving the UK in a state of Brexit limbo as Prime Minister Theresa May holds five hours of ‘showdown’ talks with the cabinet at Downing Street.
GBP/CHF Exchange Rate Flat as No-Deal Brexit Fears Haunt UK Markets
The Pound (GBP) has remained unsteady today as no-deal Brexit fears have once again returned to haunt UK Markets.
Michel Barnier, the European Commission’s Chief Brexit Negotiator, further added fuel to the fire, saying:
‘No deal was never our desired or intended scenario. But the EU27 is now prepared. It becomes, day after day, more likely.’
Today also saw the release of the UK Markit Construction PMI figures for March which came in at a worse-than-expected 49.7 against February’s 49.5.
Duncan Brock, the Group Director at the Chartered Institute of Procurement & Supply, offered a gloomy projection on the UK’s economy, commenting:
‘It is unlikely that next month will bring about any positive news given the challenges of a weaker UK economy, volatile pound and intense competition for new orders, as Brexit continues to cast a long shadow over the sector’s future.’
GBP/CHF Forecast: Sterling Could Rise on Brexit Extension
Sterling (GBP) traders will be looking ahead to tomorrow’s printing of the UK Markit Services PMI figures, and with any signs of improvement here this could buoy optimism in the economy.
Swiss Franc (CHF) investors, meanwhile, will be keeping a close eye on global political developments, and with any indications of US-China trade talks flaring up, or further friction within the EU, this could provide some positive inflow for the safe-haven currency.
The GBP/CHF exchange rate, however, will remain fixated on Brexit developments for the rest of the week, as the clock ticks down to 12 April, the official exit date of the UK from the EU.
The Pound Swiss Franc (GBP/CHF) exchange rate could benefit from signs that the EU would be willing to provide the UK a long extension, which in turn would lower the possibility of a no-deal Brexit.