The cost of hedging against major currency fluctuations between the Swiss Franc and the Euro hit it’s highest level in 2 months yesterday, as fears over impending French elections have investors worried.
The far-right political parties in France are seeing their highest levels of popularity in 30 years and just 2 weeks ago a French opinion poll put Marine Le Pen in the lead and this created enough Euro weakness to push the Pound to Euro rate to its highest level in 2017.
The reason behind investors fears is that Marine Le Pen have previously outlined her plans to remove France from the European Union and stop using the Euro. Such a shock to the Eurozone would inevitably result in volatility within the foreign exchange markets and would likely lead to CHF strength as investors run for safe-haven currencies such as CHF and the Japanese Yen.
Moving forward I’m predicting to see the Swiss Franc gain further on the Pound if there are political upsets within the Eurozone, there is also the chance of Brexit negotiations beginning badly and should this become public I would also expect to see the Pound lose value.
Yesterdays Spring Budget was uneventful and it’s likely that the Pound will remain around current levels until we have more insight into when the Brexit will begin, although those hoping for further Sterling strength should be aware the currency has been softening over the past couple of weeks.
If you are planning to make a currency exchange involving the Pound and the Swiss Franc, it’s well worth your time getting in contact with me on [email protected] in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.