The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate fell in Thursday’s trading while the Pound Sterling to Japanese Yen (GBP/JPY) exchange rate remained in a narrow range and the Pound Sterling to Russian Ruble (GBP/RUB) exchange rate climbed.
Pound Sterling to Swiss Franc (GBP/CHF) Exchange Rate Forecast
The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate was trading lower on Thursday despite a surprising fall in the Swiss KOF Leading Indicator. The index slipped from 90.9 to 89.5 in April rather than climbing to 91.5 as forecast.
KOF stated: ‘After a clear decline of the indicator in February, in which the removal of the Franc’s currency flood is reflected, the volatility of the Barometer has currently been somewhat smaller again.’
The strong Swiss Franc (CHF) has had a major impact on the Swiss economy as well as the Swiss National Bank (SNB), with the institution posting its biggest quarterly loss in history on Wednesday. The SNB’s balance sheet now has a 30 billion Swiss Franc (CHF) gap as a result of the central bank removing the cap in January.
Swissquote Bank market strategist Peter Rosenstreich commented: ‘This massive loss will have a lasting sting on the psyche at the SNB and politically within the cantons, which might hamper policy strategy moving forward.’
Pound Sterling to Russian Ruble (GBP/RUB) Exchange Rate Forecast
The Pound Sterling to Russian Ruble (GBP/RUB) exchange rate jumped during Thursday’s trading after the Bank of Russia cut interest rates for this third time this year. The move saw the central bank slash rates by a whopping 1.5% to 12.5% and warned that further rate cuts could occur in the near future.
The Bank of Russia stated: ‘According to the Bank of Russia’s forecast, rate of growth in consumer prices is slowing earlier than previously expected. Annual inflation will fall to less than 8% a year and move towards the target level of 4% in 2017. As a further weakening of inflationary risks, the Bank of Russia is ready to continue the reduction in the key rate.’
RUSSIAN CENTRAL BANK LOWERS KEY RATE TO 12.50%; EST. 13%
— World First (@World_First) April 30, 2015
The Bank of Russia move has begun to hinder the Russian Ruble’s (RUB) rebound, which has been thwarting renewed competitiveness in Russian industry.
Pound Sterling to Japanese Yen (GBP/JPY) Exchange Rate Forecast
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate recorded losses in Thursday’s trading after the Bank of Japan (BoJ) kept monetary policy stable rather than expanding its already massive programme. Many economists had expected additional easing this month but policymakers voted 8:1 to keep policy stable.
However, the BoJ did make downward adjustments to its growth and inflation forecasts. Japanese inflation is now expected to reach 0.8% in the 2015 fiscal year, downwardly revised from the previous 1.0% prediction. Additionally, Gross Domestic Product (GDP) is forecast to record 2.0% growth, down from the earlier 2.1% forecast.
However, as the BoJ didn’t take further action by expanding monetary policy, experts feel the central bank believes the economy will rebound adequately with the present level of stimulus.
Capital Economics economist Marcel Thieliant commented: ‘The bank obviously considers the slowdown in inflation since the autumn to be a temporary phenomenon, blaming it mostly on the plunge in energy prices. In our view, there is more to it than that. The economic recovery is stalling, wages are barely rising, and inflation excluding food and energy is near zero too.’
Pound Sterling (GBP) Exchange Rate Forecast: GBP/RUB, GBP/CHF, GBP/JPY
The Pound Sterling (GBP) exchange rate could be in for an interesting day on Friday with the release of Markit’s UK Manufacturing Purchasing Managers Index (PMI), UK Mortgage Approvals and UK Net Consumer Credit figures.
Additionally, Friday will bring Japanese Household Spending, Jobless Rate and National Consumer Price Index figures with it, making it an extremely interesting few days for the Japanese Yen (JPY) exchange rate.
With no Swiss or Russian data due for release on Friday, the Pound Sterling to Swiss Franc (GBP/CHF) and Pound Sterling to Russian Ruble (GBP/RUB) exchange rates will swing dependent on global developments.
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate is trading at 183.8800. The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate is trending in the region of 1.4430; the Pound Sterling to Russian Ruble (GBP/RUB) exchange rate is trading at 79.2100.
