Swiss Franc Weakens on Higher Confidence in Global Economy

The Swiss Franc has come under pressure in recent weeks which would suggest that optimism for the growth prospects of the global economy are improving. The Swiss Franc as a safe haven currency generally performs extremely well in times of global uncertainty and when things improve there is usually a direct correlation. The Swiss Franc has now weakened by nearly 4% over the last month and over 6% in the last 60 days.

It is worth highlighting that the Swiss banks actually pay their depositors to borrow money with the rate of interest standing at -0.75%. The question for the Swiss National Bank will be how to introduce new policies to manage economic growth and inflation without causing a bubble in the local currency. Swiss retails sales data and Purchase Managers Index numbers are released tomorrow which could create some volatility for the Swiss Franc. These data sets have been contracting of late and a poor set of data tomorrow could see the Swiss Franc weaken further.

Rates for GBP CHF are currently sitting over 1.36 for the pair which has presented a good opportunity for those clients looking to buy Swiss Francs with pounds are close to some of the highest levels seen in years. Those clients looking ot buy or sell Swiss Francs with pounds should pay very close attention to a Brexit cabinet meeting tomorrow which could offer greater clarity as to the governments position on whether the UK wil lremain in a customs union. The last meeting like this saw agreement at the top level which generated support for sterling exchange rates. Anything positive here could see a positive movement for GBP CHF.

For more information on the Swiss Franc and how to make the most of any windows of opportunity when making transfers then please get in touch with me James at [email protected] and I will be happy to assist.