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GBP CHF Slips from 18 Month High

GBP CHF Slips from 18 Month High
January 11
17:54 2018

GBP CHF rates remain supported over 1.32 for the pair having slipped from the 18 month high of 1.33 on Tuesday. The pound remains on a delicate footing as the overall uncertainty over Brexit continues to be a major driving force for sterling exchange rates. It has been reported that the EU are taking very seriously the prospect of a hard Brexit and have also written to 15 sectors advising them to prepare for the worst.

It highlights how tricky this negotiation will be and that the pound is still in a precarious position on the perception that Britain could be without a future trade agreement. For this reason any gains for GBP CHF are likely to be limited until more upbeat news arrives from the second round of Brexit negotiations.

Those clients looking to buy Euros or sell Euros with Swiss Francs should pay close attention to what is happening in German politics. Today concludes discussions between the two largest political parties with a view to try and re-establish the “grand coalition” headed up by Chancellor Angela Merkel. If these talks fail then we could be looking at another election in Germany or Angela Merkel could elect to run a minority government.

However the latter option could carry considerable risk for Euro exchange rates and this scenario in my view could hold back the Euro.
There is a real risk that negotiations may still fail which would mean an extended period of uncertainty for the powerhouse of the EU which result in Euro weakness. With no government in place it also means that key Brexit decisions are not being made which could slow down the process.

To discuss how these political and economic events are having a direct impact on the exchange rates and the impact on your own transfers then please feel free to get in touch with me at jll@currencies.co.uk

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James Lovick

James Lovick

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