Swiss Franc to Pound Sterling (CHF/GBP) Exchange Rate hits one-week high, also gains against US Dollar (USD)

The Swiss Franc advanced to its best level in a week against the Pound and the US Dollar on Thursday after the Bank of England and US Federal Reserve disappointed investors by being less hawkish than hoped on their outlooks for interest rate rises.

The Swiss currency found support earlier in the session after the Swiss National Bank chose to keep its benchmark interest rate unchanged at close to zero. It also said that it has reaffirmed its commitment to the minimum exchange rate of CHF1.20 per Euro after saying that there was a danger of volatility in the forex and financial markets.

The SNB also kept its growth forecasts for 2014 unchanged citing that GDP was likely to expand by 2.0% and expects inflation to inch higher to 0.1% from its previous forecast for a figure of 0.0%.

“The SNB will continue to enforce the minimum exchange rate with the utmost determination. If necessary, it is prepared to purchase foreign currency in unlimited quantities for this purpose, and to take further measures as required. Consequently, there are no signs of any inflation risks in Switzerland in the foreseeable future The global economy should firm over the coming quarters, but economic developments will remain subdued by historical standards,” the Central Bank said in a statement following its regular quarterly policy review, adding that the currency was still high.

The Swiss Franc was also finding support from its status as a safe haven currency as concerns over an escalation in the Iraqi conflict rose after US President Barrack Obama told Congressional leaders that he does not need lawmakers approval to take action in Iraq, suggesting that US airstrikes could commence soon.

The Pound and US Dollar were both weakened yesterday after their respective Central Banks disappointed economists by being less hawkish than hoped regarding possible interest rate rises.