Pound Swiss Franc (GBP/CHF) Exchange Rate Falls as BoE Says UK Economic Outlook is ‘Unusually Uncertain’

GBP/CHF Exchange Rate Sinks as BoE Holds Interest Rates

The Pound to Swiss Franc (GBP/CHF) exchange rate dipped today, with the pairing currently trading around 1.178fr.

Sterling fell against many of its peers today after the Bank of England’s (BoE) meeting revealed a dovish outlook for the British economy.

The Bank commented that the nation’s economic situation remains ‘unusually uncertain’, leaving many GBP investors worried about the months ahead.

However, the BoE did offer a glimmer of hope, saying:

‘Recent domestic economic data have been a little stronger than the committee expected at the time of the August Report, although, given the risks, it is unclear how informative they are about how the economy will perform further out.’

Nevertheless, Brexit uncertainty has continued to weigh on Sterling today. GBP has suffered on uncertainty over whether the UK could secure a post-Brexit trade deal with the EU and the US.

Democratic Presidential candidate, Joe Biden, warned the controversial Brexit Internal Bill could jeopardise a UK-US trade deal.

As a result, the GBP/CHF exchange rate has remained subdued as Britain’s economic future remains shrouded in uncertainty.

Swiss Franc (CHF) Edges Higher as Rising Swiss Exports Boost Optimism in Economy

The Swiss Franc (CHF) rose against the Pound today despite Switzerland’s Trade Balance figure for August falling below forecasts to 3583 million.

However, Swiss exports grew in August, buoying confidence in the nation’s economic recovery from the coronavirus pandemic.

Nevertheless, the safe-haven CHF has suffered from growing hopes of a breakthrough for a Covid-19 vaccine.

Consequently, investors have sought out riskier assets instead, leaving the Swiss Franc under pressure as risk-on market mood continues to grow.

Furthermore, with signs that China’s economy is recovering, we could see the CHF falls as safe-haven demand eases off.

GPB/CHF Outlook: Could UK-EU Brexit Tensions Drag Down Sterling Further?

Pound (GBP) investors will be looking ahead to tomorrow’s release of the UK Retail Sales figure for August. If this drops below forecasts, then we will see Sterling suffer.

Meanwhile, CHF investors will be paying close attention to global economic developments. Any signs of an increasing number of Covid-19 cases worldwide would buoy the safe-haven Swiss Franc.

Brexit developments will continue to be dictated movement of the GBP/CHF exchange rate. As a result, worsening tensions between the UK and EU would prove GBP-negative.

David Moore

Contact David Moore


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