GBPCHF exchange rates have been falling lately due to both sterling weakness, but equally CHF strength. The domestic news in the UK politically and Brexit have been weakening the GBP as investors have been taking there money from the UK and investing in other assets including the CHF. The Swiss Franc is well known as a safe haven, and with anxiety surrounding Trade tensions, Italian politics as well as Brexit the CHF has been in demand, pushing its value higher.
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All these topics where highlighted at the most recent Swiss National Bank (SNB) meeting which took place yesterday. Historically the SNB is well known to intervene in instances when its currency increases in value by printing money and buying foreign assets. This flow of capital out of the CHF in the past has helped it maintain a key currency range with its closest trading partner the EU. In recent times however, it has stopped this technique but again yesterday suggested it could well re-start it if the CHF continues to strengthen. The Central Bank also slashed its 2019 inflation target to 0.5% from 0.8%, and revised its growth forecasts for 2019 down from 2.5% to 1.5%. This had a negative impact on the CHF and its value making it cheaper to buy.
Next week there are a number of reports that could affect its value including Business Economic forecasts on Tuesday, a further SNB update on Wednesday and a full Import & Export update on Thursday. Generally, these are expected to fall in line with expectation.
Outside of domestic data, equally keep an eye on global tension levels, in particular those of US-CHINA, following the arrest of a high-ranking Chinese national. She was detained in Vancouver on claims by the US she helped Huawei, one of China's most prominent tech companies, dodge sanctions on Iran. This week President Trump said in an interview that he might intervene in the legal saga if it would help the United States and China reach a trade deal. This has the potential to derail the deflated tensions between the two largest economies in the world, which could in turn drive demand for the CHF due to its safe haven status.
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