The British Pound to Euro (GBP/EUR) and British Pound to Swiss Franc (GBP/CHF) exchange rates both advanced toward the close of Thursday’s European trading after upbeat UK CBI Trends Selling Prices and Trends Total Orders stats emerged.
CBI Trends Selling Prices reached 8 in February after January’s -6. Meanwhile, Trends Total Orders hit 10 from January’s 4.
Earlier… The British Pound to Euro (GBP/EUR) exchange rate fell in the early hours of Thursday’s European session while the British Pound to Swiss Franc (GBP/CHF) exchange rate remained in a narrow range after upbeat Swiss Trade Balance stats.
The Swiss trade surplus reached 3.433B in January from the previous 1.514B. Economists had expected a fall to 1.230B.
The British Pound to Euro (GBP/EUR) and British Pound to Swiss Franc (GBP/CHF) exchange rates rocketed in the early part of Wednesday’s European trading after UK unemployment decreased and wage growth jumped.
The Pound has been softer in recent months as economists forecast the Bank of England (BoE) will keep interest rates lower for the rest of 2015 and well into 2016 after weaker UK data encouraged speculation that the economic recovery was faltering.
However, this week saw core inflation rise rather than fall as forecasts had suggested; the UK Core Consumer Price Index reached 1.4% in January on the year from 1.3%.
However, the non-core measure, which includes volatile items such as food and energy prices, fell from 0.5% to 0.3%.
Despite falling inflation as a result of tumbling oil prices, the BoE has suggested that it wouldn’t be deterred from hiking rates when the economic timing was right.
The surge in employment is likely to see investors readjust their bets for a rate hike in the near future.
UK Employment and Wage Growth Bolsters BoE Rate Hike Expectations
UK Jobless Claims Change showed a massive -38.6K jobseekers stopped applying for benefits after finding work, while Employment Change surged to 103K—over double the 50K forecast.
The favourable Employment Change stat allowed the Unemployment Rate to drop from 5.8% to 5.7%.
One extremely positive progression in the UK economy came in the form of Average Weekly Earnings, which jumped from a positively revised 1.8% to 2.1% in the three months though December on the year.
Economist at Berenberg Bank in London Rob Wood stated: ‘Improving nominal pay, along with falling petrol and food prices, should combine in a powerful cocktail that puts the fizz back in the UK recovery. We expect the BoE to hike rates faster than the markets expect, starting with a first hike in February next year.’
Meanwhile, the Euro has been trading tentatively as discussions between Greece and its creditors continue. Wednesday has seen Greece publish Eurogroup proposal documents which are likely to be scrutinised by investors in a bid to anticipate the outcome of the negotiations.
Meanwhile, Thursday will see the European Central Bank (ECB) publish its account of the most recent monetary policy meeting, which could cause Euro exchange rate swings. The Eurozone will also release Consumer Confidence data, forecast to rise from -8.5 to -7.5 in February.
Swiss Franc Unsteady after ZEW’s Expectations Survey Shows Confidence Flops
The Swiss Franc lost its balance on Thursday after the ZEW Swiss Expectations survey crashed to the lowest level on record, coming in at -73.0 in February from -10.8 in January.
Analysts at Credit Suisse stated: ‘This nosedive—the biggest monthly drop in the history of the indicator—shows that the financial analysts surveyed are forecasting a much worse performance for Switzerland’s economy than before in the aftermath of the removal of the EUR/CHF [currency cap].’
The Swiss National Bank (SNB) has suggested that it is presently too early to tell whether the Swiss economy will fall into recession as a direct consequence of removing the Euro to Swiss Franc (EUR/CHF) cap.
However, SNB chief Thomas Jordan has stated that he’s ready to intervene in the foreign exchange market if necessary to keep the ‘Swissie’ in check.
British Pound to Euro (GBP/EUR) and Swiss Franc (GBP/CHF) Exchange Rate Forecast
The British Pound to Euro (GBP/EUR) and British Pound to Swiss Franc (GBP/CHF) exchange rates could fluctuate on Thursday when the UK releases CBI Trends Selling Prices and CBI Trends Total Orders stats on Thursday.
However, British Pound market movement may be more pronounced on Friday when UK Public Finances, Public Sector Net Borrowing and Retail Sales ecostats are published.
Meanwhile, Thursday will see Swiss Trade Balance figures reach publication, which could affect both the GBP/CHF and EUR/CHF currency pairs.
The British Pound to Euro (GBP/EUR) exchange rate is residing at 1.3570. The British Pound to Swiss Franc (GBP/CHF) exchange rate is trending in the region of 1.4493.
