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GBP/CHF What to expect (Daniel Johnson)

GBP/CHF What to expect (Daniel Johnson)
April 26
07:51 2017

Theresa May’s Snap Election announcement causes the Pound to rally

Last week Theresa May called a snap General election due to take place on 8th June. Historically a snap election has caused the currency in question to weaken, however on this occasion Sterling strengthened. It was a shrewd move by May to call an election while the competition is so weak. A conservative government is seen as the safe bet for the UK economy and this caused a surge in investor confidence which in turn strengthened the pound.

Trade Negotiations crucial to the value of the Pound

Following the triggering of article 50 trade negotiations will be vital to the value of the pound. Theresa May has indicated of late that it may be possible to use the blue-print from current EU deals with other nations for the UK. Essentially, copy and pasting existing deals to greatly reduce the time scale on negotiations. She has however admitted negotiations could well exceed the two year target. Poor Sir Ivan Rogers, former EU ambassador had resigned before her statement due to the unrealistic target stating it could take as long as a decade to complete trade negotiations.

I am of the opinion we have seen the worst levels for GBP/CHF for the foreseeable future when GBP/CHF struck 1.19 in November last year. I am of the opinion Sterling is undervalued and as trade negotiations become more apparent the pound will have the opportunity to strengthen.

Swiss Franc could be the safe haven of  choice for investors

With Trump in power my job could now become distinctly tougher. His unpredictability and rash decisions are sure to cause significant volatility during his tenure. The North Korean situation demonstrates this. He already has the USS Carl Vincent aircraft carrier heading towards the Korean peninsula, let us hope it is simply posturing. During times of conflict investors move their funds into safe haven currencies and with the US currently at the forefront of any potential conflict the Swiss Franc could well be the destination of choice. If the situation escalates expect the Swiss Franc to strengthen.

If you have a currency requirement it is crucial to be in touch with an experienced broker to try and maximise your return. If you let me know the currency pair you are trading, time scale and the size of your trade I will endeavour to produce a free trading strategy to suit your needs. If you have provider already in place let me know the rates you have been offered and I confident I will be able to demonstrate a significant saving. I work for Foreign Currency Direct PLC, we have been trading for over sixteen years and are registered with the FCA. Please do get in touch if you would like my assistance. You can contact me at dcj@currencies.co.uk. Thank you for reading.

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Daniel Johnson

Daniel Johnson

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