GBPCHF exchange rates remained volatile during yesterday’s trading, with the currency pairing reaching its highest levels in over two weeks during the course of the day. The economic and social impact of the Coronavirus pandemic continue to be the main driver behind exchange rate movement, and this is likely to continue as economic data releases from around the globe highlight the detrimental impact of the spread of the virus.
Swiss Manufacturing Output Drops to Lowest Levels Since 2009
Data released from Switzerland yesterday pointed to a slight rise in inflation figures for March by 0.1% on the back of rising retail and new car prices. Earlier this week it was also revealed that Manufacturing PMI numbers for March highlighted the lowest levels seen since 2009 and a fall below 50, and therefore indicates that the manufacturing sector is showing signs of shrinking. Manufacturing output makes up for around 20% of the Swiss economy, and therefore if the sector continues to drop, which it is expected to, then GBPCHF rates could continue to rise. Speaking earlier this week, Claude Maurier at Credit Suisse stated, “I still think the manufacturing PMI has some way further down to go while the service industry reading, although very worrying, will stabilise around that level.”
Half of UK Businesses Expected to Lay off Over 50% of Their Workforce
A survey release by the Office for National Statistics yesterday showed the strain that the current pandemic is putting on UK businesses, with more than a quarter of British companies reducing staff levels using the government’s furlough scheme in order to help navigate their way through the crisis. The British Chamber of Commerce released the results of a similar survey yesterday, which predicts that almost half of British businesses will temporarily pause employment of over 50% of their workforce in order to cope with reduced revenues. This is likely to put strain on the economy going forward and could therefore have a significant bearing on the value of the Pound going forward.
This afternoon sees the release of Markit Services PMI data from the UK for March and it will be interesting to see if the numbers mirror those seen in Switzerland earlier this week. For any clients with a GBPCHF requirement in the short-term, it may be worth contacting us ahead of this data release so that you can be kept informed of all the latest market fluctuations.
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