The GBP to CHF interbank exchange rate is now between 1.2017 and 1.2092. The pound seems to support today that Prime Minister Boris Johnson is on the verge of recovering from Covid-19.
Swiss economy expected to shrink 10%
Switzerland has had more than 23,000 cases of coronavirus, which has had a negative impact on their economy, current expectations being that their economy could decrease by 10%. Many industries in Switzerland have been affected, including the manufacturing and industrial sectors which have ceased to function. This was evident last week when the country’s manufacturing purchasing index fell to a record low of 43.7 and unemployment hit 2.9% in March.
Meanwhile, the Swiss government pledged on Wednesday to lift economic restrictions in late April. President Simonetta Sommaruga said her government was preparing to relax the current restrictions to ease the pressure on individuals and businesses. “The government knows that our employees, our families, our businesses, our employees and our self-employed people need a vision for the future, and they need it quickly,” said President Simonetta Sommaruga at a conference. Press.
Switzerland has already launched a support program of 62 billion Swiss francs to help companies benefit from partial unemployment benefit and loan guarantees. It has also recently broadened the prospect of bridging loans to the aviation sector, which has been hit hard. This fragile position in Switzerland could put pressure on their currency, and we could see the pound sterling to the Swiss franc fall.
UK mixed data
This morning, it was no surprise to see UK gross domestic product (YOY) data released below forecast at 0.3% versus 1.1% forecast. There were, however, some positive data on UK manufacturing output for the month of February, which was better than expected at 0.5% from 0.1% forecast.
Although the recent focus has been on the coronavirus, Brexit is still on the agenda. While Michel Barnier and Boris Johnson are both infected with the virus, talks will continue very soon as the June deadline approaches. European Union chief negotiator Michel Barnier will hold talks with his counterpart next week to organize further negotiations, but there is uncertainty as to whether or not there will be a delay.
With public holidays in the UK and Switzerland on Good Friday and Easter Monday, it is unlikely that there will be a lot of exchange rate movements in the meantime and a chance for the market to take a break.
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