Pound Swiss Franc (GBP/CHF) Exchange Rate Falls as Brexit Talks ‘Close to Breaking Down’
The Pound Swiss Franc (GBP/CHF) exchange rate slumped by around 0.9% on Tuesday with the pairing currently trading at around 1.2112Fr.
Sterling slipped as a Downing Street source revealed that talks in Brussels are ‘close to breaking down’ and deal is ‘essentially impossible’ following a phone call between Prime Minister, Boris Johnson and German Chancellor, Angela Merkel.
According to the source, the German premier made it clear to Johnson that a deal based on his ‘final’ proposal is ‘overwhelmingly unlikely’ and would only be possible if Northern Ireland remained in the customs union.
With the likelihood of a UK-EU deal before the Halloween deadline unlikely, market sentiment declined further as Downing Street texts published by The Spectator magazine claimed that if the current deal ‘dies in the next few days, it won’t be revived’.
Safe-Haven Swiss Franc (CHF) Rises as US-China Tensions Deepen
The safe-haven Swiss Franc enjoyed an upswing of support as dampened risk-appetite followed a deterioration in US-China trade relations.
Washington blacklisted Chinese companies over their alleged involvement in abuses against ethnic Uighurs, raising the likelihood that this week’s face-to-face US-China trade talks will falter.
Beijing dismissed the allegations as groundless, with foreign secretary spokesman, Geng Shuang saying:
‘There is no such thing as these so-called ‘human rights issues’ as claimed by the United States. These accusations are nothing more than an excuse for the United States to deliberately interfere in China’s internal affairs.’
President Donald Trump warned that unless Beijing found a peaceful and humane resolution to the Hong Kong protests trade discussions would be hurt. He also insisted he would not be happy with a partial deal, adding:
‘We think there’s a chance we could do something very substantial. I would much prefer a big deal and I think that’s what we’re shooting for.’
Swiss Franc (CHF) Rises as Unemployment Remains Steady
The Swiss Franc also saw a boost as unemployment in Switzerland remained steady at 2.1% in September, with the figures beating forecasts to remain unchanged at a 17 and a half year low.
Pound Swiss Franc Outlook: Will GBP Slide as Brexit Negotiations Break Down?
Looking ahead, the Pound (GBP) will likely slide against the Swiss Franc (CHF) if reports reveal Brexit negotiations between the UK and EU have broken down.
Commenting on this, Neil Wilson of Markets.com said:
‘Sterling is under the cosh again as hopes for a deal between the UK and EU fade. The last flicker of hope was snuffed out this morning after a call between the PM and chancellor Merkel of Germany left the process at an impasse. The news across the wires is that Merkel said a deal will only work if [Norther Ireland] stays in the customs union. No 10 said this demand is impossible and that the EU is not engaging seriously. It’s become clear a deal cannot be done, with the wording from Number 10 that a deal is ‘essentially impossible not just now, but ever’.
‘Stalemate. We are now heading towards the Revoke versus No Deal showdown.’