The Swiss Franc Strength Continues (Ben Fletcher)

Sterling continued its latest slump dropping into the 1.24’s for the first time in 5 years. After the biggest fall in the cost of houses for 9 months the markets have moved massively against Sterling. Furthermore the construction industry is essentially in recession causing very little confidence in the pound. Today there were rumours that the UK Government may not be looking to implement Article 50 and that Britain may not leave the EU till the earliest of 202 if that was the case.

The expected fallout appears to be finally kicking in after their looked to be limited damage to the economy at first glance. Should this bad data continue there is a real threat that the Bank of England may choose to cut the interest rate down to 0.10%. The Governor, Mark Carney has suggested that he would not in his time implement negative interest rates. This has at least provided confidence in the market of where the bottom is however 0.1% essentially makes saving pointless.

Switzerland benefits from bad news from other currencies and the situation with Sterling especially is creating a huge over valuation. There is not positive news coming from Switzerland to support this movement and whilst it may continue for a medium period the collapse will come eventually.

Once the UK gets through 2016 and the Brexit is old news there will be the opportunity for businesses to start to grow again. This I think in the long term see the GBP/CHF rate move back towards the 1.40 level.

Working at a currency brokerage allows me to significant control over the level of exchange rates I can offer. I am also able to assist with the timing of a transaction to make sure you get the most for your money. If you do have a currency requirements please feel free to send me Ben Fletcher an email at [email protected].