The pound to Swiss Franc exchange rate still struggles to make any material gains amidst global concerns for economic growth and the uncertainty around Brexit. Rates for the GBP CHF pairing are now hovering around the 1.32. Whilst the pound has been boosted in recent weeks on optimism that a deal between the UK and EU will be reached, there still remains deep uncertainty on whether the Government will be able to get the deal through Parliament. Meetings between the attorney general Geoffrey Cox and Michel Barnier have been taking place this week to try and find a compromise over the contentious Irish backstop.
Still though no breakthrough has been found which is preventing GBP CHF rates from climbing higher. The clock is ticking with a meaningful vote to be held in Parliament next Tuesday 12th March. The deadline leaves very little time for any announcements to be made in the way of the EU offering some type of concession on the backstop to state that it will be time limited. Any statements from politicians this week surrounding the backstop are likely to create considerable market volatility for the GBP vs CHF pair. It has been reported that the EU have given Britain a deadline of tomorrow to come up with a final solution to the backstop.
The Swiss Franc is also being heavily strengthened by the global uncertainties especially when it comes to the trade war between the US and China which is having wider negative impact on the global economy to a degree. Talks between the US and China are reported to be making good progress with a potential deal expected to be signed off by the end of this month. Such a trade deal could mark a turning point and could help to reignite growth across the globe.
As a result of this, the Swiss franc could see a period of weakness if investors move out of the Swiss Franc and to other currencies instead. However, there are real concerns that another global recession could be looming and whilst the prospect of a trade deal should be welcome news for the global economy, the markets might not be ready yet to drop the safe haven status of the Swiss franc. That trade deal may take a considerable amount of time to bear fruit which could see the Swiss franc remain strong for the foreseeable future.
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