GBPCHF rates have climbed by 2 cents this week, resulting in buying CHF hitting the highest level seen in 90 days. Rates are up over 1.5% over the last 72 hours resulting in an additional CHF 4,200 on a £200,000 transfer.
|Currency Pair||% Change in 1 month||Difference on £200,000|
The reason for this climb has come from a number of factors but most of the gains have come from the shake up in the political landscape within Switzerland. We have had the economy minister resign this week who has been a very big European supporter, this at a time when Switzerland are currently negotiating trade ties with their largest partner, Europe. The cabinet is due to spell out its strategy on Friday so many expect a further fall for CHF’s value and for buying the CHF to become cheaper still.
The Swiss National Bank (SNB) gave their quarterly update yesterday and suggested that after a number of strong quarters of growth they expect a contraction in domestic activity for the rest of the year. The SNB also contracted inflation forecasts for the remainder of the year, which added to the weakening in the CHF’s value this week. The bank also highlighted the changes globally to risk, the crisis of confidence in Turkey and Argentina have not really had a global economic impact. This was further added to yesterday when President Trump at the United Nations highlighted that tensions in Korea have deflated considerably. This all helped to weaken the CHF making it cheaper to buy as demand for it as a safe haven investment dropped.
Next on the horizon is a business activity release on Friday morning. Currently this is expected to show an expansion presenting an improvement meaning we could well see these better levels evaporate by the end of the week.
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