It’s been a bullish few weeks for the pound’s value during September up until now, with the pound gaining on the Swiss Franc by over 3% during this time. Sterling is trading at the highest levels against CHF since early August, which is a similar situation to the pound’s performance against the euro.
Sterling is climbing against most major currencies at the moment, with hopes of the Irish border issue being resolved shortly. The next EU Summit is just 2-weeks away and I would expect Brexit to be one of the main talking points. If the UK, Ireland and the EU can come to an arrangement before then I would expect to see the pound climb quite dramatically. The UK’s Prime Minister Theresa May has proposed that the whole of the UK remains in the customs union, but this has been rejected by the EU so far.
The UK is expected to have a Brexit deal in place by the end of next month, and those following the GBP/CHF exchange rate will be aware that the markets are expecting to see the pound climb if a deal is arranged.
At the same time as this current sterling strength and hopes of a deal, the Swiss franc has been losing value recently as it appears that the markets have adopted a more bullish outlook and a higher attitude to risk.
With the Swiss Franc being widely considered as a safe haven currency, it tends to benefit in times of market uncertainty. In the current climate we’re seeing the opposite affect which is why CHF has been losing value. The positive gains for the pound have accentuated the market movement between GBP/CHF.
There are no major economic data releases out of the UK or Switzerland today, so those planning on making a transfer between the pairs discussed today will need to look to next week for the next potential market mover driven by data.
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