With traders still anxious over the cool rate of global economic growth; safe haven assets such as the Swiss Franc have appreciated against high-yielding currencies. This is despite better-than-expected Chinese data. Sterling has continued to struggle as the slow global recovery tempers expectations regarding the timing of the Bank of England’s decision to tighten monetary policy.
The Pound Sterling to Swiss Franc exchange rate is currently trending in the region of 1.5334.
An International Monetary Fund report last week indicated that global economic growth was slow and country-specific. It also suggested that a fresh financial crisis could be on the cards if traders continue to take excessive risks on global markets, encouraged by the prolonged period of ultra-low interest rates.
In the wake of the report Sterling declined against the majority of its peers. The depreciation was compounded by an unimpressive construction output print which overshadowed better-than-expected trade balance data.
As stated above, the IMF report caused traders to seek safe-haven assets. The Swiss Franc, therefore, managed to stack up some healthy gains against higher-yielding currencies towards the end of last week.
The Pound Sterling to Swiss Franc exchange rate has dropped to a low today of 1.5325.
On Monday the Pound has continued to struggle against negative sentiment as traders temper their bets on the timing of a benchmark rate increase. An uptick in the Lloyds Employment Confidence from 6 to 10 hasn’t been enough to provoke a Sterling rebound.
An absence of Swiss data on Monday hasn’t had a detrimental effect on the Franc as its safe-haven qualities have kept it trending higher. Better-than-forecast Chinese Import and Export data has seen trader anxieties over global stagnation ease a little, but not enough to warrant a decline in risk aversion.
Forecast for the Pound to Swiss Franc Exchange Rate
Tuesday will be an important day in terms of gauging Britian’s economic performance. Inflation data is of particular interest because inflationary pressures have been highlighted by the Bank of England as the greatest obstacle preventing a benchmark rate increase. Those invested in the Pound will be hoping that inflation and average earnings data better correlates. Both the Consumer Price Index and the Core CPI have been forecast to decline, meaning inflation would move further away from the 2% target.
Swiss data is relatively inconsequential on Tuesday and is unlikely to register against trader risk aversion. Swiss Producer and Import Prices contracted by -1.2% in September of last year.
The Pound Sterling to Swiss Franc exchange rate has advanced to a high today of 1.5392.
