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GBP CHF Breaks Back Over 1.34

GBP CHF Breaks Back Over 1.34
January 23
18:03 2018

GBP CHF rates have surged higher this week after what has been a uncertain start to 2018 for sterling exchange rates. GBP CHF has moved higher above 1.34 as a more upbeat outlook on Brexit has been perceived. Comments from the former Conservative Treasury Minister Jim O’Neil were particularly upbeat this week and have really been a confidence boost for the British economy despite the ongoing uncertainty over Brexit. He made clear that as global growth in the economy is picking up now, then this should be good news for the British economy which will help exports out of the UK. The Bank of England tome has also become slightly hawkish from one member Michael Saunders who has suggested unemployment could see a material shift lower which would also be good news for the UK and hence sterling

The Brexit negotiations will recommence next week and will tackle the transitional arrangement between Britain and the EU. The discussions on future trade will not commence until sometime in March which still eaves a continued period of uncertainty for sterling exchange rate.

UK government borrowing data today arrived considerably better than expected after VAT receipts surged and which should help the government’s finances going forward. The UK unemployment data released tomorrow however could be a big market mover on the back of a stronger number. My view however is that the Gross Domestic Product numbers could be a new driver for sterling exchange rates.

Although expectation is a for a slight weakening in the numbers there is some optimism in the markets that there could actually be a rise to 1.8% which would be welcome news for the pound. Clients holding sterling may wish to act and secure funds before Friday to avoid any potential disappointment.

To discuss how these events are likely to impact on your requirement either buying or selling Swiss Francs then please get in touch with me at jll@currencies.co.uk

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James Lovick

James Lovick

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