Swiss Franc weakens vs Sterling after UK data

The Swiss Franc retreated on Thursday due to strong global macroeconomic data, particularly from the United Kingdom. The safe-haven Swiss Franc fell against the Pound due to the positive boost to investor risk appetite from the figures. China recorded a higher-than-expected Services PMI for December, showing the world’s second largest economy holding its form. This was followed by stronger-than-forecast US labor market data.

Sterling rose in most pairs on the back of strong lending data, which showed people continuing to borrow and take out mortgages, seemingly unfazed by higher interest rates. A strong Services PMI result seemed to turn the tables on the negative narrative that has bedeviled the UK economy since growth data was revised down to show a contraction in GDP in Q3.

Safe-havens like Gold and the Swiss Franc take a hit while risk-on currencies like Sterling rise. China Caixin Services PMI rises to 52.9 in December, easily beating estimates of 51.6 and November’s 51.5. Eurozone Services PMI is equally positive.

US private payrolls data beats estimates, with ADP Employment Change showing the economy added 164,000 new employees in December, against 115,000 expected. UK lending data suggests borrowers are still taking out loans despite higher interest rates.

GBP/CHF, the number of Swiss Francs that one Pound Sterling can buy, shows a small recovery this week despite the overall bearish tenor of the chart. The pair is arguably in a downtrend on the weekly chart below despite a recovery taking place on the daily and intraday charts.