The pound has rallied higher against the Swiss Franc with rates for the GBP/CHF pair now sitting over 1.32. Pound to Swiss Franc exchange rates have been lifted on the back of some optimism over Brexit, that a deal will be reached between Britain and the EU. The markets are awaiting developments over the contentious Irish backstop which could pave the way forward for a deal. In particular there have been meetings in the EU with the UK’s attorney general Geoffrey Cox to try and find the necessary text for a legal codicil to be written up alongside the existing withdrawal agreement. If the backstop is not permanent then the deal may have a shot at getting through Parliament and this should result in sterling strength.
Such a breakthrough could see material gains for GBP to CHF rates ahead of the meaningful vote to be held in Parliament 12th March. This date should be marked in the diary as the outcome of this vote will dictate the travel for GBP to CHF. If the vote is lost by the Government then there will be two more days of votes which could even lead to an extension of Article 50, all adding further uncertainty for sterling exchange rates.
The Swiss Franc meanwhile remains strong as global uncertainty continues to drive the Swiss Franc higher. With a noticeable slowdown in China including a huge reduction in Chinese vehicle imports the global markets are in cautions mode. The Swiss Franc shines in times like these when there is global uncertainty and it doesn’t look like things are going to change in the near future.
Whilst US President Donald Trump and Chinese leader Xi Jinping are still looking to hammer out a deal the progress is slow and more time has been given to extend the deadline which was to come into effect today. Initially today was going mark the date when the US was to impose further tariffs on Chinese exports destines for the US. Any breakthrough in these coming weeks and months could restore confidence in the global markets which could see the Swiss Franc lose some of its recent appeal.
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