Pound to Swiss Franc Exchange Rate Climbing amid Hopes US-China Trade Talks Won’t Collapse
The safe haven Swiss Franc (CHF) would typically benefit from global market fears and fresh US-China trade tensions, but despite this the Pound Sterling to Swiss Franc (GBP/CHF) exchange rate has been trending steadily today.
Since opening at the interbank level of 1.27 this week, GBP/CHF has been trending with a mixed upside bias.
While GBP/CHF has been unable to hold the half-year-high seen at the beginning of the week, the pair is still trending higher in the region of 1.28 at the time of writing.
Investors have been buying the Pound (GBP) on hopes for a smooth outcome to next month’s anticipated general election, while the Swiss Franc is a little weaker amid mixed global trade developments and central bank speculation.
Pound (GBP) Exchange Rates Steady as Markets Calm over Election Jitters
After seeing poor performance since Tuesday evening, the Pound’s (GBP) strength steadied again today as investor concerns about Britain’s upcoming general election cooled.
The Pound has been strengthening in recent weeks, on hopes that Britain’s ruling Conservative Party will win a majority in the election and pass its relatively soft Brexit plans.
However, following a TV debate this week between UK Prime Minister Boris Johnson and opposition Labour Party Leader Jeremy Corbyn, the Pound’s strength was dented.
Corbyn performed better in the debate than analysts had been expecting. 49% of viewers polled by YouGov said that Corbyn won the debate, compared with 51% who said the same of the PM.
While the polling gap between the two parties is not expected to have significantly narrowed, the Pound’s performance has been weaker since the debate though it has steadied again today.
Swiss Franc (CHF) Exchange Rates Dampened as China Continues to Press for Trade Deal
The safe haven Swiss Franc (CHF) briefly benefitted from market demand for safe haven currencies in recent sessions, amid fresh market concerns that US-China trade relations were significantly worsening.
China reportedly wanted more rollback in current tariffs, and speculation also rose that China was unhappy with the US Senate passing a bill backing Hong Kong protestors. It caused concerns that a preliminary trade deal could be pushed back as far as next year.
However, the safe haven demand was short-lived, as reports emerged this morning that China would still try hard to reach a trade deal sooner.
Trade talks between #China and the #US will continue, says MOFCOM spokesperson Gao Feng, urging media outlets not to count on rumors. He did not provide further details of the latest talks, including the telephone call between the representatives over the weekend. #tradewar pic.twitter.com/n7UOwnf5Mx
— Global Times (@globaltimesnews) November 21, 2019
On top of a lack of safe haven demand, Swiss Franc demand has also been limited amid expectations that the Swiss National Bank (SNB) will remain dovish.
Due to global trade speculation and central bank expectations, today’s Swiss industrial production stats were largely overlooked by markets despite the data beating expectations.
Pound to Swiss Franc (GBP/CHF) Exchange Rate Could Continue to Brush Over Data
Key UK PMI projections from November will be published tomorrow, but Pound to Swiss Franc (GBP/CHF) exchange rate investors could easily brush over these figures as well amid the continued market focus on politics and trade.
The Pound to Swiss Franc (GBP/CHF) exchange rate is on track to sustain gains this week, and unless political uncertainty worsens before the weekend the Pound (GBP) is unlikely to see fresh losses.
Sterling movement will remain focused on UK politics, especially election polls. Any signs that the televised debate caused a rise in support for the opposition Labour Party could cause fresh Pound losses.
On the other hand, continued signs that the ruling Conservative Party will win a majority next month will keep the Pound buoyed.
The Swiss Franc (CHF) may be more likely to drive GBP/CHF movement in the coming sessions, as markets are closely watching developments in US-China trade relations.
If US-China trade relations do worsen on tariff rollback disagreements and the US stance on Hong Kong, safe haven demand could see a stronger rise and the Pound to Swiss Franc (GBP/CHF) exchange rate could see fresh losses.