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GBP CHF Weakness Amidst Brexit Negotiaions

GBP CHF Weakness Amidst Brexit Negotiaions
February 05
17:45 2018

The pound has come under pressure against the Swiss Franc this week as Brexit discussions intensify. The EU lead negotiator Michel Barnier is in London today to discuss the future relationship between Britain and the EU and there appears to be a big drive to try and reach a deal, for the time being anyway.

The statement however from the British government this morning which has made it abundantly clear that Britain will be leaving the customs union appears to be having a negative impact on the pound. The tone coming out of the EU is that Britain now faces choices and that barriers to trade are going to be unavoidable. The uncertainty is putting a lot of pressure on the price of sterling with falls today across the board including the Swiss Franc.

GBP CHF rates have slipped today to below 1.31 for the pair having almost broken the 1.35 threshold towards the end of January only a couple of weeks ago. The drop has presented those clients looking to sell Swiss Francs with a window of opportunity after what has been a reasonable start to the year for GBP CHF.

Economic data from Switzerland is light this week so the focus for clients looking to buy Swiss Francs should also centre on the Bank of England interest rate decision on Thursday. Any positive commentary from Bank of England Governor Mark Carney could see the pound react. Any suggestion that the central bank will be looking to raise interest rates later this year could help see the pound move higher although we may be jumping the gun here.

Brexit and its future impact on the UK remains the main driver for sterling exchange rates and this is unlikely to change in the near future.
To discuss how these events may impact on your own currency requirement then please get in touch with at jll@currencies.co.uk

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James Lovick

James Lovick

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