Swiss Franc Outlook: Swiss Economy Impacted As CHF Exchange Rate Declines

Published: 20 Oct 2017 21:24 Currency Markets

swiss franc exchange rate today

British Pound to Swiss Franc Exchange Rate Pairing as Historic Growth Figures Bolster Sterling

The Pound Sterling to Swiss Franc exchange rate edged higher by around 0.2%, trending in the region of 1.4798. As gold prices decline in response to hawkish bets regarding the timing of the Federal Reserve benchmark interest rate hike, the Swiss Franc declined versus many of its major peers.

The Swiss Franc and the Pound Sterling exchange rates are ending this week on a relatively quiet note, although despite holding the lion’s share of economic publications, the Franc has not capitalised on this factor.

Today, the Swiss Real Retail Sales figure for August has come in with a -0.3% drop compared to a previous 0.1% rise, while the important SVME-Purchasing Manager’s Index (PMI) for September dived from 52.2 to 49.5, a clear indication of contraction.

The price of gold per 100 ounces also disappointed investors, continuing its precipitous fall from almost $1155 on September 24th to $1112 today. As a result of all this pessimism, the Franc fell to 0.6753 against the Pound.

Events were more positive coming out of the Konjunkturforschungsstelle (KOF), as they had predicted long term stability for the Franc’s performance

.

The Pound has been helped out tremendously today by the report from the Office of National Statistics (ONS) that UK growth is 5.9% higher than it had been before the financial crashes of the late-2000s; elsewhere, the UK Manufacturing PMI for September fell but improved on predictions, although as this still indicated a fall, the beneficial impact was mitigated. Tomorrow, the UK Construction PMI for September is due out and a fractional rise has been predicted. No Swiss results are due until next week.

A quick foreign exchange market summary before we bring you the rest of the report:

On Thursday the Pound to British Pound exchange rate (GBP/GBP) converts at 1

The live inter-bank GBP-GBP spot rate is quoted as 1 today.

The live inter-bank GBP-EUR spot rate is quoted as 1.17 today.

At time of writing the pound to us dollar exchange rate is quoted at 1.263.

Please note: the FX rates above, updated 28th Mar 2024, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.

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US Data Glut Results in Decline in CHF-USD Conversion Rate, Further Losses Predicted

As Federal Open Market Committee (FOMC) policymakers have continued to give speeches across the course of this week and the last, the US Dollar has been supported in its struggles against the Franc immeasurably.

Despite this, however, Fed policymakers seem reluctant to fan the flames of an expectation for an interest rate hike ahead of the October 28th meeting of the FOMC; this has been seen in speeches by Fed Chair Janet Yellen and fellow member James Bullard yesterday

.

Both Yellen and Bullard refrained from mentioning their intentions regarding the crucial decision while speaking in St. Louis last night, although this fact is open to multiple interpretations. The first is that despite voicing their support of an early rate hike last week, both Fed members are reluctant to provide false hope to investors by reiterating this sentiment closer to the date, as many swaying US data releases are still due before the end of October. The second is that because the topic of the speeches was explicitly on ‘Community Banking’, both officials simply considered in unnecessary to repeat themselves.

The USD will be moved the most in the near-future by the ISM Manufacturing result for September; as of writing, a fall from 51.1 to 50.6 had been predicted. The Swiss Franc has reached 1.0228 against the US Dollar today.

Swiss Franc Delivers a Killer Blow in CHF-EUR Exchange Rate Today as Eurozone News comes up Sour Again

The Eurozone has been an unpopular source of bad news for investors in the common currency recently, as for three days running, results have failed to provide the support needed to the Euro to chase away concerns over further European Central Bank (ECB) quantitative easing. Although currently on a downtrend, the Franc has done well against the Euro this week, hitting a high of 0.9192 early this morning. More recently, this rate has dropped to 0.9178.

The Eurozone Manufacturing PMIs for September have painted an unclear picture. France grew while the Eurozone remained unchanged, but Italy and Germany both fell below expectations to diminish confidence in the common currency today.

Tomorrow, Euro movement will come from the Eurozone PPIs for August, both of which have been forecast highly pessimistically.

KOF Downgrades ‘Swissie’ Indicators but makes Positive Prediction for Swiss Franc into Next Year and Beyond

Although the Swiss KOF downgraded its Leading Indicators for the Swiss economy yesterday from 101.02 to 100.4, the think-tank also offered a positive forecast for the long-term performance of the Franc against its closest rival (in all senses), the Euro.

As part of its predictive report, the KOF evaluated that: ‘Now that the Greek debt crisis appears to be over, the Swiss Franc-Euro exchange rate has stabilised. Despite the turbulent development of the Asian financial markets, the Swiss Franc has depreciated in the second half of the year. Its previous role as a safe haven appears to have receded into the background compared to spring. KOF forecasts a Euro-Swiss Franc exchange rate of 1.10, which is expected to persist throughout the forecast period.’

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