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Will GBPCHF rise or fall?

Will GBPCHF rise or fall?
August 16
17:12 2017

The pound is looking like it could easily struggle further in the future and any clients looking to buy the Swiss Franc with pounds should be very careful that they do not get caught out with unexpected movements against them. The main driver on the Franc has been the North Korean situation which has seen the Swiss Franc strengthening as it is a safe haven currency. In times of uncertainty such as the North Korean tensions we see assets that are classed as ‘safe’ strengthen. Whilst the tensions have subsided there does appear to be an ongoing risk of further uncertainty which would see the Franc rise.

Overall expectations for the pound continue to be negative which means GBPCHF could well struggle to rise in the future, the belief is that ultimately the pound will rise but this could take many weeks or even months to happen. It all comes down to the Brexit and the uncertainty this presents. As we still don’t know exactly what Brexit means it is difficult for the market to price in the cost. All the market can do for now is price in the worst case scenario, particularly as the uncertainty continues to effect economic data. The worse economic data is really all the market can go on and this is what is leading to the pound struggling.

The uncertainty of Brexit is also weighing down on the Franc since it is another global event which increases investor concern, the Franc is therefore being used as a haven against and away from the uncertainty Brexit creates. With GBPCHF now in the 1.25’s it would be very surprising to see it rise back to the 1.30 so I think something back in the lower 1.22-1.23 range is more likely.

Ultimately the price on the Franc depends on the outlook globally and global events continue to work against those buying Francs with pounds. If you have a transfer to make in the future getting everything setup in advance is wise. For any further information on the market or our services please contact me Jonathan directly by emailing jmw@currencies.co.uk.

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Jonathan Watson

Jonathan Watson

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