GBP/CHF Falls After Poor Manufacturing Data

Sterling Suffers After Poor Manufacturing Output Figures

The pound has been left on the back foot as it was announced on Tuesday that manufacturing production for May fell by 0.8%, contracting at its fastest pace for four months, highlighting Britain’s reliance on services to stimulate growth. As a result, GBP/CHF has fallen back into the 1.43’s.


The pound tumbled against most of its major rivals after the data release earlier in the week, losing over a cent against the dollar and around 0.6% against the euro. The figures from the Office for National Statistics showed that the massive contraction in manufacturing output was driven largely by a drop in production of basic drugs and metals.

It was the fastest contraction since January and was much worse than the 0.3% growth that economists had been forecasting. The data came as a surprise to most economists as recent surveys seemed to be indicating that British manufacturing activity had increased significantly in May and had picked up in June, helped by strong demand for British made cars and clothing.



“Today’s figures feel a little out of kilter with other industry data and what our manufacturing clients are telling us,” said Mike Rigby, head of manufacturing at Barclays.

“To many it feels like we are experiencing a more positive outlook but today’s figures do show that a number of challenges still persist. It’s not surprising to see the manufacture of base metals and products has contributed to the fall in manufacturing as commodity prices fell during the period.”


Despite the recent weakness in the pound, separate data from the ONS showed that Britain’s overall trade deficit hit its highest in three months as the volume of exports of goods fell in May. This has fuelled further speculation that Mark Carney may attempt to increase the UK’s level of monetary easing in an attempt to weaken sterling further. The trade deficit was estimated to be £2.4 billion in May, compared with £2.1 billion in April. The negative data pushed GBP/CHF rates into the 1.42’s before recovering slightly.

“Overall, our trade deficit is still too large, and we are not making fast enough progress in rebalancing our economy towards net exports. Our recent economic survey revealed huge untapped potential among British exporters, especially in services, and releasing this potential will help to secure a sustainable recovery.”

On the Swiss side of things, the Franc has been supported by safe-haven demand with continued uncertainty over the US Federal Reserve’s plan to start tapering its quantitative easing programme, helping bring GBP/CHF rates down.

If you need to buy or sell Swiss Francs, or any other currency, contact me today for a free, no obligation consultation by completing the enquiry form on the right.

Choppy Day for GBP/CHF

Volatile Day for GBP/CHF with BoE and ECB Meetings

It’s been a fairly volatile day for the sterling/franc cross with key announcements from the European Central Bank and the Bank of England with sterling initially losing ground against both the franc and the single currency before heading back up towards the 1.44 mark.


It was the first meeting of the Monetary Policy Committee since Mark Carney took over at the Bank of England on July 1st. As was widely expected, the Bank of England decided to keep interest rates at their record low of 0.5%, unchanged for over four years. It was also announced that they would not be adding to the £375 billion of quantitative easing already proposed. The decision not to embark on further Q.E. had been expected after a string of positive data suggested that the UK economy may finally be on the road to recovery. The better figures of late have reinforced hopes that growth in the second quarter of 2013 will be stronger than the first, when GDP increased by 0.3%.

“At its meeting today, the committee noted that the incoming data over the past couple of months had been broadly consistent with the central outlook for output growth and inflation contained in the May [inflation] report. The significant upward movement in market interest rates would, however, weigh on that outlook; in the committee’s view, the implied rise in the expected future path of Bank rate was not warranted by the recent developments in the domestic economy,” the MPC said.

Despite leaving interest rates and Q.E. unchanged, sterling lost a percent against the euro and the dollar in the half an hour following the announcement. It’s thought that sterling lost ground after the Bank of England confirmed that they would not be putting an end to monetary stimulus anytime soon, criticising the US’s decision to do so after causing turmoil in global markets.

Across the channel, Mario Draghi said the European Central Bank were taking unprecedented measures to re-assure markets that it had no plans to raise interest rates anytime soon. Considering the rising bond yields in Portugal, Draghi admitted the ECB had considered a rate cut, sending the single currency lower against sterling and the greenback.



“The governing council expects the key ECB rates to remain at present or lower levels for an extended period of time,” Draghi told a news conference.

The Franc tracked movements in the euro, first gaining against sterling and then losing ground as the euro weakened, ending the day in the 1.44’s. If you need to buy or sell Francs, the key is to catch the market as it spikes in your favour. Currency brokers can help with the timing of your purchase to ensure you’re making the most of your currency. Contact me today for a free, no obligation consultation by completing the contact form on the right.




Choppy Day for GBP/CHF

Volatile Day for GBP/CHF with BoE and ECB Meetings

It’s been a fairly volatile day for the sterling/franc cross with key announcements from the European Central Bank and the Bank of England with sterling initially losing ground against both the franc and the single currency before heading back up towards the 1.44 mark.


It was the first meeting of the Monetary Policy Committee since Mark Carney took over at the Bank of England on July 1st. As was widely expected, the Bank of England decided to keep interest rates at their record low of 0.5%, unchanged for over four years. It was also announced that they would not be adding to the £375 billion of quantitative easing already proposed. The decision not to embark on further Q.E. had been expected after a string of positive data suggested that the UK economy may finally be on the road to recovery. The better figures of late have reinforced hopes that growth in the second quarter of 2013 will be stronger than the first, when GDP increased by 0.3%.

“At its meeting today, the committee noted that the incoming data over the past couple of months had been broadly consistent with the central outlook for output growth and inflation contained in the May [inflation] report. The significant upward movement in market interest rates would, however, weigh on that outlook; in the committee’s view, the implied rise in the expected future path of Bank rate was not warranted by the recent developments in the domestic economy,” the MPC said.

Despite leaving interest rates and Q.E. unchanged, sterling lost a percent against the euro and the dollar in the half an hour following the announcement. It’s thought that sterling lost ground after the Bank of England confirmed that they would not be putting an end to monetary stimulus anytime soon, criticising the US’s decision to do so after causing turmoil in global markets.

Across the channel, Mario Draghi said the European Central Bank were taking unprecedented measures to re-assure markets that it had no plans to raise interest rates anytime soon. Considering the rising bond yields in Portugal, Draghi admitted the ECB had considered a rate cut, sending the single currency lower against sterling and the greenback.



“The governing council expects the key ECB rates to remain at present or lower levels for an extended period of time,” Draghi told a news conference.

The Franc tracked movements in the euro, first gaining against sterling and then losing ground as the euro weakened, ending the day in the 1.44’s. If you need to buy or sell Francs, the key is to catch the market as it spikes in your favour. Currency brokers can help with the timing of your purchase to ensure you’re making the most of your currency. Contact me today for a free, no obligation consultation by completing the contact form on the right.




AUD CONTINUES TO LOSE GROUND AGAINST GBP AND EUR.

Good afternoon, 
The interest rate announcement by the RBA on Tuesday turned out to be a bit of a non event as rates were kept on hold at 2.75%. There had been increasing calls by some sectors of the Australian economy to cut interest rates further in an effort to stimulate growth. For the best exchange rates click here.


The Housing Industry Association (HIA) has been at the forefront of championing a need to cut rates further and indeed were quite outspoken about their disappointment in the recent hold in rates. A senior spokesman for the association suggested the decision will only extend the slump in the housing construction industry where activity is currently at its lowest level in 10 years.
One might argue that it is now looking less likely that we will see an interest rate cut any time soon in Australia as the value of the Dollar has dropped significantly since May. This suggestion is supported by Credit Swiss whose analysts estimated only an 18% chance of an interest rate cut in July. 
Due to a sustained period of cutting rates in 2012 it is now thought that it may be as late as November before we see any further cuts whilst the economy settles down and effects of the cuts can be quantified. There are small positive signs as Australian’s Manufacturing Index is up and house prices are starting to rise slowly in some cities.
Since the rate decision the Australian Dollar has lost some ground against the Pound, this may be due to number of better than expected data releases in the UK over the past couple of days. Consumer Credit, Net Lending and PMI inflation data were all marginally better than expected which buoyed on the Pound against a range of currencies including the Australian Dollar.

With Mark Carney taking up his position as Governor of the Bank of England on Monday, AUD purchasers were pleased to hear that the value of the Pound didn’t instantly melt away as overexcited commentators were suggesting it might! That said tomorrow will be a key day for the Pound with the first Interest Rate decision with Mark Carney at the helm (will he spring any surprises on us?). Watch out for increased volatility over the time of the decision and be prepared for the potential rapid movement of the currency markets following the decision and eagerly anticipated statement by the new Governor.
If you are looking to make the most out of your funds or discuss your options when it comes to currency exchange; take the next step and send us a free enquiry and have a consultation on all the options available to you. It’s free, it doesn’t obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Complete the enquiry form on the right to send a free enquiry now

AUD CONTINUES TO LOSE GROUND AGAINST GBP AND EUR.

Good afternoon, 
The interest rate announcement by the RBA on Tuesday turned out to be a bit of a non event as rates were kept on hold at 2.75%. There had been increasing calls by some sectors of the Australian economy to cut interest rates further in an effort to stimulate growth. For the best exchange rates click here.


The Housing Industry Association (HIA) has been at the forefront of championing a need to cut rates further and indeed were quite outspoken about their disappointment in the recent hold in rates. A senior spokesman for the association suggested the decision will only extend the slump in the housing construction industry where activity is currently at its lowest level in 10 years.
One might argue that it is now looking less likely that we will see an interest rate cut any time soon in Australia as the value of the Dollar has dropped significantly since May. This suggestion is supported by Credit Swiss whose analysts estimated only an 18% chance of an interest rate cut in July. 
Due to a sustained period of cutting rates in 2012 it is now thought that it may be as late as November before we see any further cuts whilst the economy settles down and effects of the cuts can be quantified. There are small positive signs as Australian’s Manufacturing Index is up and house prices are starting to rise slowly in some cities.
Since the rate decision the Australian Dollar has lost some ground against the Pound, this may be due to number of better than expected data releases in the UK over the past couple of days. Consumer Credit, Net Lending and PMI inflation data were all marginally better than expected which buoyed on the Pound against a range of currencies including the Australian Dollar.

With Mark Carney taking up his position as Governor of the Bank of England on Monday, AUD purchasers were pleased to hear that the value of the Pound didn’t instantly melt away as overexcited commentators were suggesting it might! That said tomorrow will be a key day for the Pound with the first Interest Rate decision with Mark Carney at the helm (will he spring any surprises on us?). Watch out for increased volatility over the time of the decision and be prepared for the potential rapid movement of the currency markets following the decision and eagerly anticipated statement by the new Governor.
If you are looking to make the most out of your funds or discuss your options when it comes to currency exchange; take the next step and send us a free enquiry and have a consultation on all the options available to you. It’s free, it doesn’t obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Complete the enquiry form on the right to send a free enquiry now

Shift in Risk Appetite Weakens Swiss Franc

GBP/CHF Rises as Swiss Franc Weakens

The franc has lost ground against sterling today after a shift in investor risk appetite with market players preferring riskier assets over safe-havens such as the Swiss Franc. US data has recently painted a brighter picture for the domestic economy with the consequent risk-on environment leading to a weaker Franc. The Swiss currency had recently beneffited from safe-haven demand as investors worried over the Federal Reserve’s tapering of its quantitative easing programme, removing liquidity from global markets.


The franc actually gained ground against sterling last week, tracking movements in sterling/euro, as it was announced on Thursday that the Office for National Statistics had revised UK GDP figures for 2012, painting a gloomier picture of the UK economy than had previously been thought.


The ONS said that following a major revision of last year’s data, the economy had not contracted in the first quarter of 2012, but that growth had remained flat. This meant that the UK did not experience two consecutive quarters of contraction and had therefore not technically entered recession. This may sound positive but other figures released by the ONS painted a far gloomier picture. The average Briton’s real disposable income has fallen by 1.7% in the first quarter of this year, the largest drop since 1987, driven by a fall in real wages and an increase in prices. Housholds have therefore had to reduce their savings to the lowest share of income since 2009. The ONS figures also revealed that business investments had slumped by over 16% on the year, casting doubts on government hopes of an economic recovery based on increased exports and consumer spending.

“Overall it does look as if UK economic history has been revised in a negative direction,” said Victoria Clarke, an economist at Investec.



“It certainly looks as if the UK is a step further away now from ‘escape velocity’. We suspect that this, coupled with some inflation projections in August, will be enough to tilt the balance for the (Bank of England) to sanction more QE,” she said, referring to the bank’s monetary easing policy.

The data left sterling on the back foot, driving GBP/CHF down. However, the Franc has since weakened and rates have returned to the mid 1.44’s. Despite brief spikes and dips, GBP/CHF has been relatively flat of late. If you need to buy or sell Francs, the key is to catch the market as it either spikes or dips, depending on whether you’re buying or selling. As well as providing you with highly competitive exchange rates, we also aim to help with the timing of your conversion, helping you make the most of your currency.



If you need to buy or sell Swiss Francs, or any other currency, contact me today for a free, no obligation consultation by completing the form on the right.