Will a pick up in the Swiss economy result in a stronger Swiss Franc?

The relationship between strong economic performance and a stronger underlying currency is somewhat skewed in regards to the Swiss Franc, as the currency is often considered a safe haven and investors pile money into the currency for a number of varying reasons.

Our regular readers will be aware that in times of market uncertainty and increased risk, the Swiss Franc will often benefit as CHF and JPY see an influx of funds during these times due to their safe haven status.

This can at times skew the true value of the currency, and the Swiss National Bank often acts to ensure the currency doesn’t fluctuate overly dramatically or become unfairly overvalued.

Reports suggest that the Swiss economy has entered 2018 in a good position with 2% growth expected, which is a large gain on the 1.1% growth it saw in 2017. It’s worth noting that the second half of 2017 was stronger than the first half again compounding beliefs that this year will be stronger for CHF.

I personally expect to see the Pound trading at a higher level vs the Swiss Franc than it is now, and I also think that the pair will consolidate above the 1.30 mark it spent a lot of time below last year. The Swiss economy is also quite export driven so despite a stronger economy I don’t think the SNB will want a higher valued currency.

Tomorrow morning there will be an interest rate decision at 08.30am from the SNB, there is no change expected but any comments afterwards could move CHF exchange rates.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.