Bank of England likely to increase interest rates but will this help the Pound gain vs the Swiss Franc?

Swiss Franc Strength as Safe Haven Status Returns

The Bank of England are expected to raise interest rates later today from 0.5% to 0.75% and this will be only the second time in ten years.

The last rate hike was back in November and will take rates to their highest level since 2009.

When the previous meeting took place the Bank of England voted 6-3 in favour of keeping interest rates on hold and we will need to see a minimum of five members out of the nine voting for a rate hike for any change to happen.

The decision is likely to be close and I think the accompanying press conference will provide the market with clues as to whether we’ll see any further rate hikes coming in the near future.

If we cast our minds back to what happened just over two years ago following the Brexit vote in June 2016 the Bank of England announced an interest rate cut shortly after the decision. Therefore, I think the Central Bank could be using this opportunity to hike rates in order to give them room to cut them again next year if the Brexit talks do not go well.

I think the tone today could be rather cautious so even though I expect a rate hike to occur I do not think we will necessarily see the exchange rate for GBPCHF to be going up as much as some may expect.

Indeed, at the time of writing the GBPCHF exchange rate is hovering just above 1.30 so I do not expect to see any dramatic gains during today’s trading session.

If you’re in the process of buying Swiss Francs then it would pay to keep a very close eye out on events during today’s trading session to make sure you’re well prepared.

If you would like more information on how GBPCHF rates could be impacted by todays interest rate decision and following speech feel free to contact me directly. You can reach me on teh@currencies.co.uk.