GBP/CHF Exchange Rate Steady as Swiss GDP Grows ‘Vigorously’
The Pound to Swiss Franc (GBP/CHF) exchange rate held steady today, with the pairing currently trading around 1.210fr.
The Swiss Franc (CHF) held steady this morning following the release of the latest Swiss Gross Domestic Product data for the third quarter (Q3).
Swiss economic growth beat forecasts in Q3, rising-7% to 7.2% .
Switzerland’s State Sectariat for Economic Affairs (SECO) commented:
‘In the third quarter, Switzerland’s GDP grew vigorously, making up around three-quarters of the ground lost in the first half of the year.’
Thomas Gitzel, an economist at VP Bank Group, was more cautious, however, saying:
‘The corona pandemic will continue to leave its mark on economic development into the spring months.
‘The start to the new year also promises to be bumpy, especially because this year’s ski season will be a difficult one.’
As a result, CHF investors are remaining cautious as the outlook for Switzerland’s economy remains largely uncertain, with the effects of the Covid-19 crisis on the economy yet to fully show themselves.
Pound (GBP) Steadies as UK Manufacturing PMI Beats Forecasts
The Pound (GBP) steadied today following the release of November’s UK Manufacturing PMI, which beat forecasts and rose to 55.6.
Rob Dobson, the director at IHS Markit, had mixed opinions in his analysis, saying:
‘Confidence has risen to a level not seen since late-2014, with over three fifths of manufacturers (61%) still expecting to raise output over the coming year. On the other hand, many manufacturers remain very concerned about the outlook and generally reluctant to expand capacity, hence employment fell for the tenth month in a row.’
As a result, UK markets are meaning cautious as the UK faces an uncertain year ahead, with still no signs of a Brexit trade deal on the horizon.
However, Foreign Secretary Dominic Raab said that there is still a Brexit ‘deal to be done’, sparking hopes that Downing Street could compromise on a post-Brexit trade agreement by the end of the year.
Mr Raab also urged the EU to show ‘pragmaticism’ as talks enter their final stages.
Nevertheless, UK markets are remaining cautious, with the prospect of a no-deal Brexit weighing on confidence in the British economy for 2021.
GBP/CHF Outlook: Could the Swiss Franc Suffer as Switzerland’s Economic Outlook Dims?
Swiss Franc (CHF) investors will be awaiting tomorrow’s release of November’s Swiss Consumer Price data.
Any signs of deterioration in Switzerland’s economic outlook would be CHF-negative.
Meanwhile, Brexit developments will continue to drive the GBP/CHF exchange rate this week.
If UK-EU trade talks fail to show any clear signs of conceding on a post-Brexit trade agreement, then we could see Sterling suffer.