Swiss Franc Strength as Safe Haven Status Returns

Sterling strengthens against CHF

The Pound has fallen sharply against the Swiss Franc on the back of the Turkey crisis which is creating uncertainty throughout the financial markets globally. Rates for GBP CHF have now fallen below 1.27 as investors seek the safety of the Swiss Franc to avoid the global risks elsewhere. It has been a long time since this type of currency behaviour has been seen for the Swiss Franc and there may be more to come. The Pound is also trading at lower levels against the Swiss Franc on the back of Brexit uncertainty. With the summer Parliamentary recess there is still another few weeks to wait before new direction is offered on this front.

This time round it has been reported that Russian investors are flooding into the Swiss Franc. Due to the US sanctions that have been imposed on Russia and the risk of further issues then the Swiss Franc may become more desirable and should help strengthen the safe haven currency further.

This could spell considerable volatility for the Swiss Franc ahead. As we have seen in the past the Swiss National Bank (SNB) is able to intervene if it feels the currency is about to become too strong. The SNB may however prefer to observe future policy from US President Donald Trump with so many changes currently taking place.

All the same an intervention form the SNB does look likely at some point and clients with pending requirements would be wise to consider moving sooner rather than later to take the risk out of it. Those looking to sell Swiss Francs are currently in an excellent position to convert into Pounds although any future intervention could see that change very quickly.

For more information on the Swiss Franc and how to achieve the best rates at the optimum time then please feel free to contact me James at jll@currencies.co.uk