GBP CHF Slips after Softer UK Inflation Data

The pound has slipped against the Swiss Franc today after weaker UK inflation data fell slightly lower this morning which will be welcome news for the Bank of England. UK inflation has fallen from the recent high in November of 3.1% down to 3% which has helped see the pound fall against most of the major currencies today.

GBP CHF is currently trading at 1.3255 although a high of 1.3303 was seen earlier today. The ongoing Brexit situation continues to be a grey area at the moment and there appears to be some confusion as to what the end state will ultimately look like. With politicians from both sides of the Brexit argument making representations to the EU chief negotiator Michel Barnier there is likely to be considerable more volatility to come for sterling exchange rates in these coming months.

For the moment the pound appears to be holding steady against the Swiss Franc but the relatively high inflation data in the UK and general uncertainty over Brexit should mean that Britain does not perform as well as some of the stronger EU economies.

The Swiss National Bank is also likely to have a role in the future direction of the Swiss Franc. If you go back three years when the Swiss National Bank removed the peg between the Euro and Franc there was high volatility at this time. More action will be required in the future although the central bank has indicated that it is in no hurry to adjust interest rates. Neither a rate hike or cut is particularly appealing in the current climate. History tells us that there can be surprises which can create considerable volatility for CHF exchange rates.

To discuss how these events are likely to impact on your specific requirement then please get in touch with me James at [email protected]