The Swiss Franc has seen some weakness of late as risk appetite is changing which is creating less demand for the Swiss Franc. Investors for the moment are looking at the US for better returns after a run of positive economic data from the US and on the expectation Donald Trump’s domestic infrastructure splurge could bear fruits for investors.
In a sign of the times the Swiss Franc has now fallen to its lowest point against the Euro in just under three years.
The Swiss Franc could be set for a volatile period against both the pound and the Euro in these coming weeks. The UK continues with the Brexit negotiations which is still the big driver for sterling exchange rates. However the EU gave Britain a deadline to make sufficient progress and this ultimatum comes to an end this week. Depending on how this turns out come Friday GBP CHF is likely to see volatility.
Clients looking to buy or sell Euros for Swiss Francs specifically should keep a close eye on the political situation in Germany. With coalition talks in Germany between the three parties having broken down this is creating uncertainty for Euro exchange rates. If no agreement can be found then there is a strong chance that there could be new elections although due to the process involved in doing so it would probably not be until the spring of 2018 before elections can take place.
There appears to be some will from Angela Merkel to get negotiations back on track although this will inevitably mean concessions and a change of stance may not be easy to achieve within her party. Expect considerable volatility for EUR CHF as these events unfold and there may even be some repercussion for GBP CHF as Brexit is ultimately heavily linked to what happens in Germany.
For more information on the Swiss Franc and how these events are driving the exchange rates then please get in touch with me James at firstname.lastname@example.org