GBP/CHF Falls as Sterling Weakens

Sterling Struggles Ahead of Mark Carney Appointment as BoE Governor

The pound has been on the back foot over the last 10 days in anticipation of Mark Carney taking over the reins at the Bank of England. It’s widely expected that the Canadian will adopt an aggressive monetary easing policy in an attempt to kick-start growth in the UK economy.


Pimco, the world’s largest bond house, has warned that Mark Carney will attempt to devalue the pound by as much as 15% in a last ditch effort to cement the UK recovery as it’s feared that growth in Britain is going to remain stagnant for the next three to five years as the government continue to shrink the public sector in an effort to reduce the budget deficit. It seems that the only policy tool left for the government to use is that of currency manipulation, devaluing sterling in the hope that it encourages exports. A weaker pound would also encourage UK companies to source supplies from within the UK, stimulating demand for UK products as foreign goods would become more expensive.

The Chancellor of the Exchequer, George Osborne, is pinning his hopes on Mark Carney to live up to his reputation as a monetary activist by pursuing a fairly aggressive monetary easing policy, ie. through quantitative easing to try and stimulate an export-led recovery rather than relying on consumer spending.



“I think a lot of what Mark Carney is going to do – clearly he’s not going to state this upfront – is to try and keep sterling certainly from going up and, probably, he’s going to want to see it go lower,” Mr Amey, of Pimco, said. “On a trade weighted basis I think another 10pc to 15pc is manageable.

Quantitative Easing will almost certainly weaken sterling as it is essentially a money printing programme. Of course, flooding the economy with freshly printed sterling will inevitably lower its inherent value, weakening the currency making domestic products cheaper for foreign buyers. The last time an additional round of Q.E. was announced sterling weakened significantly. The same can be said for the dollar when the Federal Reserve announced their aggressive policy. As a result, sterling has already begun losing ground against its major counterparts, including the Swiss Franc.

On the Swiss side of things the Franc has recently been supported by defensive demand, benefitting from its status as a safe-haven currency. However, demand has been kept in check by concerns that the Swiss National Bank may indeed lower its euro minimum level to 1.25 in an attempt to increase competitiveness.

Considering the continuing uncertainty in Switzerland, the eurozone and the UK, now may be the time to assess your options if you need to buy or sell Swiss Francs over the coming months. Contact me today by filling out the enquiry form on the right to find out how you can limit your exposure to adverse movements in the currency markets.


GBP/CHF Falls as Sterling Weakens

Sterling Struggles Ahead of Mark Carney Appointment as BoE Governor

The pound has been on the back foot over the last 10 days in anticipation of Mark Carney taking over the reins at the Bank of England. It’s widely expected that the Canadian will adopt an aggressive monetary easing policy in an attempt to kick-start growth in the UK economy.


Pimco, the world’s largest bond house, has warned that Mark Carney will attempt to devalue the pound by as much as 15% in a last ditch effort to cement the UK recovery as it’s feared that growth in Britain is going to remain stagnant for the next three to five years as the government continue to shrink the public sector in an effort to reduce the budget deficit. It seems that the only policy tool left for the government to use is that of currency manipulation, devaluing sterling in the hope that it encourages exports. A weaker pound would also encourage UK companies to source supplies from within the UK, stimulating demand for UK products as foreign goods would become more expensive.

The Chancellor of the Exchequer, George Osborne, is pinning his hopes on Mark Carney to live up to his reputation as a monetary activist by pursuing a fairly aggressive monetary easing policy, ie. through quantitative easing to try and stimulate an export-led recovery rather than relying on consumer spending.



“I think a lot of what Mark Carney is going to do – clearly he’s not going to state this upfront – is to try and keep sterling certainly from going up and, probably, he’s going to want to see it go lower,” Mr Amey, of Pimco, said. “On a trade weighted basis I think another 10pc to 15pc is manageable.

Quantitative Easing will almost certainly weaken sterling as it is essentially a money printing programme. Of course, flooding the economy with freshly printed sterling will inevitably lower its inherent value, weakening the currency making domestic products cheaper for foreign buyers. The last time an additional round of Q.E. was announced sterling weakened significantly. The same can be said for the dollar when the Federal Reserve announced their aggressive policy. As a result, sterling has already begun losing ground against its major counterparts, including the Swiss Franc.

On the Swiss side of things the Franc has recently been supported by defensive demand, benefitting from its status as a safe-haven currency. However, demand has been kept in check by concerns that the Swiss National Bank may indeed lower its euro minimum level to 1.25 in an attempt to increase competitiveness.

Considering the continuing uncertainty in Switzerland, the eurozone and the UK, now may be the time to assess your options if you need to buy or sell Swiss Francs over the coming months. Contact me today by filling out the enquiry form on the right to find out how you can limit your exposure to adverse movements in the currency markets.


GBP/CHF Rises After Mervyn King Speech

Sterling Strengthens After Bank of England Inflation Report

The pound has continued its recent run against the Swiss currency today after a speech by the current Governor of the Bank of England, Mervyn King, in which he said that economic recovery is finally in sight. “It was not a typical recession and it will not be a typical recovery, nevertheless a recovery is in sight.”


King reckons Gross Domestic Product, an aggregate of everything produced and consumed in the UK, will strengthen to a healthy half a percent in the next quarter, up from 0.3% for the first quarter. He’s forecasting a gradual improvement in the growth figures over the next 6 quarters and reckons that we may be exiting the worst slump since the Great Depression of the 1930’s.



It’s the first time the Central Bank has revised upwards its growth forecast since the current economic crisis began in 2008. The Bank’s optimistic Inflation Report comes after a recent consumer sentiment poll revealed that optimism over the UK’s economic outlook has surged, with 30% of the country’s population now expecting the country to be better off in 12 months time, up from 22% last month. George Osborne must be breathing a sigh of relief after 3 years of continuous gloom since the Coalition came into power.

The Bank also said that inflation was not rising as much as had intially been feared and that the interest rate would remain below one percent for at least another four years.

Despite the recent run of positive data, some economists are not convinced that we’ve seen the back of the recession. With one eye on his legacy and one on the economy, the temptation for Sir Mervyn to look for positives must have been overwhelming. The recovery may be ‘in sight’, but only if you’re looking through a telescope.

The rise in GBP/CHF is not entirely due to a strengthening pound. The franc has weakened significantly over the last week as investors move away from defensive assets. There is also still some specualtion that the Swiss National Bank are on the verge of raising the minimum euro level to 1.25 in an attemp to increase competitiveness. As a result, GBP/CHF has broken through the 1.47 mark and EUR/CHF was briefly trading above 1.25.


If you’re looking to buy or sell Swiss Francs, or any other major currency, contact me today by filling out the enquiry form on the right.

GBP/CHF Rises After Mervyn King Speech

Sterling Strengthens After Bank of England Inflation Report

The pound has continued its recent run against the Swiss currency today after a speech by the current Governor of the Bank of England, Mervyn King, in which he said that economic recovery is finally in sight. “It was not a typical recession and it will not be a typical recovery, nevertheless a recovery is in sight.”


King reckons Gross Domestic Product, an aggregate of everything produced and consumed in the UK, will strengthen to a healthy half a percent in the next quarter, up from 0.3% for the first quarter. He’s forecasting a gradual improvement in the growth figures over the next 6 quarters and reckons that we may be exiting the worst slump since the Great Depression of the 1930’s.



It’s the first time the Central Bank has revised upwards its growth forecast since the current economic crisis began in 2008. The Bank’s optimistic Inflation Report comes after a recent consumer sentiment poll revealed that optimism over the UK’s economic outlook has surged, with 30% of the country’s population now expecting the country to be better off in 12 months time, up from 22% last month. George Osborne must be breathing a sigh of relief after 3 years of continuous gloom since the Coalition came into power.

The Bank also said that inflation was not rising as much as had intially been feared and that the interest rate would remain below one percent for at least another four years.

Despite the recent run of positive data, some economists are not convinced that we’ve seen the back of the recession. With one eye on his legacy and one on the economy, the temptation for Sir Mervyn to look for positives must have been overwhelming. The recovery may be ‘in sight’, but only if you’re looking through a telescope.

The rise in GBP/CHF is not entirely due to a strengthening pound. The franc has weakened significantly over the last week as investors move away from defensive assets. There is also still some specualtion that the Swiss National Bank are on the verge of raising the minimum euro level to 1.25 in an attemp to increase competitiveness. As a result, GBP/CHF has broken through the 1.47 mark and EUR/CHF was briefly trading above 1.25.


If you’re looking to buy or sell Swiss Francs, or any other major currency, contact me today by filling out the enquiry form on the right.