Pound Sterling to Swiss Franc Exchange Rate (GBP/CHF) Steady, Heavy Swiss Data Week Ahead

November 4, 2014 - Written by James Fuller

STORY LINK Pound Sterling to Swiss Franc Exchange Rate (GBP/CHF) Steady, Heavy Swiss Data Week Ahead

The British Pound traded in a narrow range vs the Swiss Franc (GBP/CHF) exchange rate following the release of Markit’s UK Construction Purchasing Managers Index and the latest Swiss Real Estate Bubble Index.

The British Pound (GBP) was offered little support when the measure of the construction sector dropped from September’s 64.2 to 61.4 in October, despite economists’ forecasts to soften to a more favourable 63.5.

However, the GBP enjoyed gains against other majors on the release of the European Commission’s autumn forecast, which predicts UK growth will occur at a faster pace than previously thought.

CHF Exchange Rates Today:

The Swiss Franc to Euro exchange rate converts +0.09 per cent higher at 1 CHF is 0.83027 EUR.
The Swiss Franc to Pound Sterling conversion rate is +0.36 pct higher at 0.65098 CHF/GBP.
The Swiss Franc to US Dollar exchange rate today is converting +0.52 per cent higher at 1.04162 CHF/USD.

The report suggests: ‘The strong growth enjoyed in the first half of 2014 is expected to continue, driven by private consumption and investment.’

However, the inflation forecast for the UK is still relatively weak, with the European Commission only expecting an advance from the current 1.2% to 1.9% by 2016.

One of the most significant days for Sterling will be Thursday when the Bank of England (BoE) announces its rate decision, an event that has previously caused massive exchange rate fluctuations.

Switzerland at risk of Housing Bubble

The Swiss UBS Real Estate Bubble Index grew in the third quarter from 1.24 to 1.29—further intensifying the risk of a housing bubble.

Any reading above 2.0 index points suggests a bubble has occurred. UBS representatives Matthias Holzhey and Claudio Saputelli commented: ‘Low price increases induce a reduction of risks, only if at the same time incomes, consumer prices and rents increase more strongly. This did not occur.’

Meanwhile, the Swiss National Bank (SNB) has been targeted by a Swiss initiative which has launched a campaign called ‘Save Our Swiss Gold’.

The aim of the movement is to force the SNB to hold a minimum of 20% of its total gold assets in bullion with a ban to sell it—an outcome that will be decided in the upcoming Gold referendum.

So far, support for the movement has been dwindling, with the latest polls suggesting a lack of enthusiasm from voters.

Swiss news site 20 Minuten undertook the most recent survey which showed only 38% of the public supporting the ‘Yes’ vote, down from the previous 45%.

Swiss Franc to Pound Exchange Rate Forecast:

Wednesday will be an influential day for the Swiss Franc with the release of the Swiss Consumer Price Index (CPI).

At present the annual figure is forecast to remain at -0.1% in October as it did in September.

Markit’s UK Composite and Services PMI figures are also scheduled to be published on Wednesday and may create an interesting day of GBP to CHF movement.

However, Switzerland is having a highly productive week for publishing data and Thursday will see the release of Swiss Consumer Confidence.

Furthermore, Swiss Unemployment Rate, Retail Sales and Foreign Currency Reserves figures will be published on Friday alongside UK Trade Balance numbers.

In addition, Bank of England Governor Mark Carney will be speaking in Paris on Friday which could cause major Sterling fluctuations.

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