Today is crucial for Swiss Franc exchange rates with a number of economic releases and political events happening around the world which are likely to have a direct bearing on the direction of the Swiss Franc.
The US Federal Reserve interest rate decision is released this evening where it is a near certainty that there will be an interest rate hike from 0.75% to 1%. Another two increases are expected later this year. The Swiss Franc is likely to be impacted by this decision as in my view there is likely to be a return of funds to the US dollar following the higher yield and away from Switzerland. Any reaction however is likely to be muted considering the markets should have completely priced in this event.
Tomorrow is also key with the Swiss National Bank interest rate decision. No change is expected but the central bank has been known historically to throw up some surprises and also may be concerned with the strength of the Franc.
The Dutch elections being held today could also see a movement away from the Euro and into the safety of the Swiss Franc. Should Geert Wilders party perform better than expected then the Swiss Franc could strengthen materially. Any further cracks in the EU will undoubtedly see the Euro weaken so CHF EUR could see some good gains.
As far as GBP CHF is concerned political events in the UK particularly surrounding SNP Nicola Sturgeon’s call for a second referendum which will be voted on in the Scottish parliament next week will continue to be the main driving force here. Already polls this morning suggest that there isn’t the appetite for a second Scottish independence referendum so it will be interesting to see how politician vote on Wednesday.
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