Recently there has been a real mix of Eurozone and Swiss data which has resulted in the CHF generally weakening further against most other currencies apart from the UK Pound. The table here shows the change for the GBPCHF rate in the last month:

Currency Pair% ChangeDifference on £200,000
GBPCHF3.1%CHF 8,750
GBPCHF near 2 month high

Domestic data contracts as Swiss Franc weakens

Swiss Retail figures were released on Wednesday and showed another fall in activity. Figures dropped by 1.8% year on year which was the biggest decline since December 2016. This was also the third straight month in a row. There was also a sharp fall in consumer confidence confirmed too. This has all been attributed to the recent fall in the Swiss Francs value making consumers wary to spend.

April’s Manufacturing PMI data however beat expectation expanding from 60.3 to 63.6. This was however widely put down to the weaker Franc making domestic products cheaper to export.

The weakness currently being seen is widely expected to help the economy overall and many expect the labour market to improve as everything from fine watches to chocolates become cheaper to export. Something positive for the economy there, however I personally expect global events to be the bigger driver in the value of the CHF moving forward and for it to continue to trend the way it has getting cheaper still.

Forecast for GBPCHF to trend higher

Next on the horizon is a speech by the Swiss National Bank (SNB) chairman Jordon which is expected this afternoon. This will be particularly interesting to get an insight into the bank’s thinking and policy as the CHFEUR pairing has now revisited the historic target level of 1.20 for the first time in two years. 

As a result speculation has been building that the SNB may well start to look to change central policy. Personally I see this as a long way off but any suggestion or indication by the bank will certainly have an impact on the market value of the CHF.

Global risk appetite also historically has an impact on the demand for the CHF and therefore its value. As global geopolitical tensions seem to be continuingly easing, especially in the Korean peninsula, it suggests that the Swiss Franc may well continue to fall in demand further and therefore value. 

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