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Currency Pair% ChangeDifference on £200,000
GBPCHF4.5%CHF 11,350

Buying Swiss Francs has now reached the highest level that we have seen for over 15 months

Buying Swiss Francs reached the cheapest levels seen in over a year yesterday morning. This was a build-up of both European weakness and Sterling strength. This Pound push was as a result of the market pricing in expectation before the Bank of England interest rate hike, which itself was incorrect.

The BoE failed to meet the expectation in the market which in turn created a GBP sell off and this 15 month high evaporating just as quickly. The market continually do this, traders will price in the most likely outcome of a political or economically event. On the basis that these forecasts are correct the market barely moves, however if different the market spikes pricing in the new information. More often than not recently, moving on the expectation rather than the result works out to be the best strategy.

Why has GBPCHF climbed this week?

Economic data driving Swiss Franc value this week

Swiss Manufacturing PMI data came out on Wednesday showing an improvement, which now sits at the highest level since 2011. Next on the horizon for Swiss Franc value is with Consumer Price Index (CPI) being released on Monday. On Tuesday we are expecting Foreign Currency Reserve information and then on Thursday Retail figures.

CPI data has been slowly creeping higher so I expect a good figure here making it more valuable. However, between the three it is the event on Tuesday which I personally expect to be most influential on the value of the Franc.

The Swiss National Bank (SNB) continually tries to manage the value of its currency buy buying foreign investment. This is an effort to off-set the impact of traders buying into the CHF due to its safe haven status. As a result this release will be keenly watched. Most expect an increase in spending by the SNB meaning this could potentially be the cheaper time to buy Swiss Francs for the next 7 days.

Thank you for reading today’s market report, I would greatly appreciate any feedback you have and would take pleasure in replying personally. I am more than happy to assist you with any of your currency requirements. Feel free to e-mail me at hse@currencies.co.uk.


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