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GBP CHF Slides after Mark Carney Comments

GBP CHF Slides after Mark Carney Comments
April 20
08:13 2018

The Swiss Franc has weakened considerably against the pound over the last week with rates for this pair breaking through 1.38 yesterday. There has been a sustained rally in the price of sterling on a perceived better outlook on Brexit over these last few weeks. The second round of negotiations have been completed which allows for a transitional period and for trade to continue in much the same way as it has been. The negotiations have re-opened this week and this third round will cover the future trade relationship after that transitional period. This is believed to be the most complex aspect in the negotiations and any negative commentary could see the pound fall and the Swiss Franc strengthen. For the moment there is a good opportunity to buy Swiss Francs with pounds with levels for GBP CHF trading around the 1.38 levels.

UK retail sales data released yesterday took a major drop with the lowest levels seen in a year. However once again the blame has been firmly placed on the Beast from the East cold weather front and the markets have largely shrugged off the negative data. The pound did come under some pressure this week after UK inflation data arrived weaker than expected which is putting into question whether or not the Bank of England will raise interest rates at the next policy meeting in May.

The pound has weakened as a rate hike is now not looking as definite as it had been. Mark Carney has made it clear that the rate hike that was expected for May is not as definite as it was. In my view there are still likely to be some Brexit headwinds heading the UK’s way and any prospect of a no deal scenario is likely to see sterling fall very sharply.

For more information on the Swiss Franc and how these events may impact on your own currency transfer then please get in touch with me at jll@currencies.co.uk

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James Lovick

James Lovick

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