Upbeat Swiss economic sentiment has propelled the Swiss Franc higher on Wednesday, for a second straight session. The Franc settled on Tuesday 0.1% higher versus the Pound at 1.2117.
At 11:15 UTC, GBP/CHF is trading -0.25% at 1.2088. This is at the lower end of the daily traded range of 1.2070 – 1.2144.
Swiss Economic Sentiment Impresses
Demand for the Swiss France has soared after data revealed that investor sentiment unexpectedly rebounded in April. The Swiss investor sentiment index surged to 12.7 up from -48.5 in the previous month. This was significantly ahead of analysts’ forecasts of -41.
The improved mood among investors comes as Switzerland gradually eases lock down measures and reopens its economy. Switzerland reopened a selection of shops on Monday, including hair salons, DIY stores and garden centres while the army hands out 1 million masks a day to shops and businesses. Meanwhile, doctors’ surgeries, dentists, creches and beauty salons opened on Tuesday. Authorities and investors will be watching carefully to se whether the gradual reopenings leads to a new spike in covid-19 cases. Other shops and schools are set reopen from 11th May.
Switzerland’s largest trading partner, Germany, is also reopening its economy, which will be supportive of the Swiss economy, helping to underpin the Franc.
UK To Wait Longer For Lock Down Release?
After a stronger start the Pound is trending lower. Whilst economies across Europe are starting to slowly reopen, the UK economy looks set to remain closed, possibly until mid-May amid a lack of testing and tracing means.
The NHS app which the UK government will use as part of its exit strategy will only be ready for wide scale use in 2 – 3 weeks. The government has opted for the NHS app over ones designed by Apple or Google.
Brexit headlines are also weighing on the Pound on Wednesday, after taking a back seat for the past month. The British government has been vehement about not extending the Brexit transition period beyond the 31st December this year. Initial rounds of trade deal negotiations only yielded limited progress towards a future agreement. There are just 9 weeks to go until the deadline for the UK to extend the transition period.
