The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate advanced to trade near to a 2-week high on Tuesday as the Swiss National Bank (SNB) reaffirmed that it was willing to intervene in the currency market.
The GBP/CHF Exchange Rate hit a session high of 1.384
SNB Vice President Jean-Pierre Danthine said in an interview with Tages-Anziger newspaper that policy maker are ‘fundamentally prepared’ to intervene again in the markets to bring the Franc down, which it considers to be overvalued. Following the banks, surprise decision to slash interest rates and ditch the Francs cap with the Euro the Franc surged higher against its major peers.
Full Alert for Intervention
‘The market is on full alert for intervention. Indeed, the SNB is saying they could intervene at any time. But there’s no confirmation, just speculation,’ said Neil Jones, head of hedge-fund sales at Mizuho Bank Ltd.
As speculation of intervention hit the market, the Swiss Franc fell to its weakest level since the SNB stunned the world by scrapping its exchange rate cap against the Euro (EUR). The currency also softened against the US Dollar (USD).
Sterling was able to advance against the Swiss Franc despite the release of data, which showed that the UK economy expanded at a slower rate than forecast in the final three months of 2014. Annual growth was also weaker than expected but was still the fastest rate of year on year growth recorded since the start of the global financial crisis in 2007.
The data released by the London based Office for National Statistics showed that on a quarter on quarter basis, the UK economy expanded by 0.5%, a figure which was below the 0.7% growth figure seen the third quarter and was below the 0.6% figure expected by economists.
‘The recovery is on track and our plan is protecting Britain from the economic storm, now is not the time to abandon that plan and return Britain to economic chaos,’ Chancellor George Osborne said following the release of the data.
