The GBP/CHF currency pair was mostly steady on Thursday, trading close to a 1 1/2-week high of 1.0596, following a marked slowdown in UK inflation.
Data by the Office for National Statistics on Wednesday showed that UK annual headline CPI inflation had eased to 2.8% in April from 3.3% in March. This outcome fell short of the expected 3.0% reading.
UK’s core CPI inflation, which excludes food and energy, eased to 2.5% in April from 3.1% in March.
The inflation report, together with an unexpected increase in the unemployment rate to 5.0%, has prompted traders to reassess the path of Bank of England policy tightening by year-end.
UK rate futures are now pricing in 52 basis points of additional BoE tightening by December, compared with 60 basis points earlier this week.
Market participants are now looking ahead to preliminary UK Purchasing Managers’ Index readings for May, which are scheduled for release later on Thursday.
Meanwhile, ongoing political instability in the United Kingdom continued to weigh on the Pound.
On the Swiss side, preliminary figures released on Monday indicated that the domestic economy expanded 0.5% quarter-on-quarter in the first three months of the year, up from 0.2% growth in the preceding quarter. This represented Switzerland’s strongest quarterly performance in a year and pointed to a steady recovery trajectory.
The GBP/CHF currency pair was last down 0.01% on the day to trade at 1.0571.
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