The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate strengthened by around 0.30% on Tuesday morning.
As we await British construction data, due for publication later on Tuesday morning, the Pound is generally holding steady versus the majority of its most traded currency rivals.
The Swiss Franc, meanwhile, softened versus most of its major peers despite positive growth figures. The declination is as a result of continued issues between the Swiss National Bank (SNB) and the Swiss government as the viability of an independent central bank is called into question.
The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate is currently trending in the region of 1.4760.
Yesterday…
The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate edged higher by around 0.20% on Monday morning.
With British economic data producing a mixed-bag of results, the Pound strengthened against some of its major peers. With many central banks looking to loosen monetary policy, however, Sterling managed to hold a position of strength thanks to policy divergence.
After the Swiss National Bank (SNB) cut their Euro cap around 6-weeks ago, the institution has come under scrutiny from the government who question the viability of an independent central bank. The surprise cut caused a ‘Swissie’ (CHF) surge which the bank has been attempting to rectify. Cooling manufacturing has aided the Franc’s downtrend, although the SNB would preferably see the Swiss asset devaluation as a response to intervention rather than domestic shortcomings.
The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate is currently trending in the region of 1.4744.
Pound Sterling (GBP) Exchange Rate Edges Higher on Manufacturing
British data provided varied results on Monday morning which saw the Pound fluctuate against its major peers. A general appreciation can be attributed to manufacturing data which showed that output bettered market estimates.
The Markit Manufacturing PMI saw February’s seasonally-adjusted output increase to 54.1, eclipsing the median market forecast of a rise from 53.1 to 53.4. Rob Dobson, Senior Economist said; ‘The UK manufacturing sector is reviving in early 2015 after the slowdown seen late last year, as growth rates of both production and new orders continued to strengthen in February. Output is now rising at a quarterly pace close to 0.5% and job creation is running at a rate of five thousand new positions filled per month. This reinforces the picture of a broader growth revival in the UK so far in the opening quarter.’
Although manufacturing printed positively; Nationwide House Prices, Mortgage Approvals, Net Consumer Credit and Net Lending Securities on Dwellings all failed to meet with median market forecast figures.
The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate dropped to a low of 1.4676 today.
Swiss Franc (CHF) Exchange Rate Forecast to Soften as SNB Independence is Questioned
As explained above, the shock move to end its Euro cap has put the SNB in the spotlight, with the Swiss government questioning the effectiveness of an independent central bank. One of the primary concerns is that policy decisions are made by a committee of only 3, much lower in comparison to other major central banks.
‘It can’t be that three people have more influence over a country’s destiny than the government,’ Susanne Leutenegger Oberholzer, a Social Democrat lawmaker, told Reuters.
‘The SNB must remain independent. But it should not make its decisions in an ivory tower, out of touch with reality,’ Nick Hayek, the head of Swiss watchmaker Swatch, said at the weekend.
Swiss manufacturing remained below the 50 mark which separates growth from contraction, causing the Franc to decline versus nearly all of its major rivals. The SVME Manufacturing PMI came in at 47.3 in February, down from the previous figure of 48.2.
Pound Sterling to Swiss Franc (GBP/CHF) Exchange Rate Forecast to Hold Gains
With sentiment towards the Swiss National Bank dwindling, and with policy divergence supporting demand for the British asset, the Pound Sterling to Swiss Franc (GBP/CHF) exchange rate is likely to hold gains for the remainder of Monday’s trade.
Tuesday is likely to see heightened GBP/CHF volatility with Swiss growth data due for publication. British construction data may also provoke changes for the pairing.
The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate has climbed to a high today of 1.4755.
