Swiss Franc Exchange Rates Could see Gains on North Korea Escalation

GBPCHF Strengthens on News That COVID-19 Spread Appears to Be Slowing

The Swiss Franc could see an interesting period ahead considering the further escalation of tensions between the US and North Korea. US bombers flew into North Korean airspace unnoticed this week which has prompted a mobilisation of jets and missiles to the East coast of North Korea. Last night President Trump said the US is prepared to take devastating military action if necessary which follows a sting of heated exchanges and insults between the two leaders.

The markets for the moment are largely shrugging on the prospect of a war in the area but should the dialogue escalate further then we could start to see a real flight to the safety of the Swiss Franc. We’re not there yet but there is a chance that the Swiss Franc could start performing again.

The pound has gained considerably against the Swiss Franc in recent weeks with levels breaking over 1.30 for GBP CHF presenting a better opportunity for those clients needing to buy Swiss Francs. The prospect of a UK interest rate hike in the UK in the next 6 months is helping support the pound.

As things stand the markets have fully priced in an interest rate hike by February 2018 and a 50% chance of a rate hike in November of this year. This is the main reason why the pound has performed so well against ye Swiss Franc over these last two weeks and has stemmed from a shift at the bank of England which has made very clear its direction for monetary policy.

Clients looking to sell Swiss Francs may wish to consider taking advantage of what are still attractive levels. It would appear the pound is now coming up off those lows.

If you would like further information on sterling or Swiss Franc exchange rates or any of the major currencies and to discuss how we can assist then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on [email protected]