GBPCHF rates have hit a new 2 month high after climbing nearly 1% yesterday. Rates have now climbed nearly 3% in the last week and 5% over the last month. The Pound has generally been climbing recently as the Brexit negotiations continue and the consensus seems to be that the they will hold firm for a better deal, however against the CHF the movement in comparison to other currencies has been much higher. As a result of the CHF being a safe-haven asset, it appreciates in times of uncertainty, so with more Brexit certainty we have seen the Pound strengthen but also the CHF fall in value.  Current levels are sitting on the trend line established back in April meaning that if broken we could well see a further run higher for the pairing.

Currency Pair% Change in 1 monthDifference on £200,000
GBPCHF4.5%CHF 11,600
SNB manipulating the Francs value?

Economic forum driving direction

Currently in Davos the world economic forum is taking place for the remainder of the week. This is when the rich and powerful meet to discuss current market conditions and update forecasts of future growth. There has already been an undertone of concerns with regards to global slowdowns.

Global policy uncertainty is at a record high due to US-China trade war, Brexit and the on-going US Government shutdown, according to Deutsche Bank. Any of these could equally escalate and cause the CHF to bounce back strongly.

Trade data next week

The next data release domestically from Switzerland is trade data on Tuesday of next week. This is expected to show a contraction which could in turn weaken the CHF on the day. Having said that, the value of CHF is driven more by international events over domestic. Personally I see GBPCHF rates being driven more by Brexit negotiations and China talks.

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