As a result of global uncertainty, following Trump's introduction of trade tariffs and Russia sharing details of their weapons capability, there has been an increased demand for the CHF. This Swiss Franc report looks at how global factors affect the Swiss Franc. The table below shows the difference in CHF you could have achieved when buying £200,000.00 during the high and low points of the past month.
|Currency Pair||% Change||Difference on £200,000|
Buying CHF reached the most expensive in five months at the end of last week. This was driven by both a lack of demand for the Pound due to Brexit negotiations and also a hike in demand for the CHF as a safe haven currency.
Demand for CHF came from a number of global events including last week’s presentation from Russia’s President Putin and commentary from President Trump. In Russia we saw them update the world on their global weapon capability including global nuclear-powered cruise missiles and underwater nuclear weapons. This was not something that suggested global peace but instead has been called the start of another cold war by commentators – this drove demand for the CHF.
In the US, President Trump’s introduction of trade tariffs is expected to put more strain between the US and China again creating more global uncertainty and yet more demand for the CHF.
Moving forward I generally see world tensions to have been lifted and therefore would suggest anyone with a CHF purchase to make to keep an active eye on the fallout from the tariffs being introduced by the US.
Swiss Consumer Price Index (CPI) figures are released tomorrow morning and are expected to show an improvement, something to be aware of if you have exposure to the CHF. On Wednesday there is Foreign Currency Reserve figures and on Thursday Unemployment figures. CPI data has been slowly creeping higher so I expect a good figure here, resulting in the cost to buy CHF to probably climb. Buyers of CHF this week may well find an improved price with Thursday’s data. As a result of the influx of demand for the CHF the national banks foreign reserves will probably have been depleted resulting in a negative figure and weakening of the CHF.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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