Brexit Deadline Day could cause substantial Sterling strength

Brexit continues to dictate GBP/EUR

GBP/CHF – Brexit is still dictating Sterling value at present. There have been signs of progress with Chief Brexit Negotiator for the EU, Michel Barnier stating it is realistic that a deal could be agreed in 6-8 weeks.

The current deadline for a deal to be put in place is 18th October, however it is an open secret that an emergency summit could take place on the 13th November to hopefully finalise a deal.

I expect there to be high levels of volatility in the build up to the deadline as both sides use their ammunition to negotiate the best terms for their respective sides.

There were some positive data releases from the UK yesterday with inflation up to 2.7% for August, and average wage growth surprisingly high at 2.9%. This now makes the chances of a rate hike from the Bank of England more probable and will increase investor confidence.

We have seen the Swiss National Bank Interest rate decision this morning. There was no change from 0.75% as predicted.

If you are selling CHF and buying Sterling I would be looking to do so before the 18th October Brexit deadline. If a deal is agreed I would expect Sterling to rally considerably. There maybe better opportunities as talks intensify, but personally I would be very happy trading at current levels (1.27) considering pre-Brexit GBP/CHF was at 1.45.

Although I do not expect GBP/CHF to rocket to 1.45 there is the chance of a substantial fall in CHF value against the Pound. If you’d like to discuss the above, or would like further information on other factors likely to impact CHF rates feel free to use the form below. I’ll be more than happy to get in touch personally and discuss your requirements.