CHF/GBP Outlook:
Slightly positive, but likely to move sideways as the rate is just above its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Swiss National Bank maintains a cautious approach, potentially considering negative interest rates to curb a strong franc, while the Bank of England holds steady, reflecting a dovish policy stance.
• Risk/commodities: A firming US dollar pressures the pound, while ongoing geopolitical tensions drive demand for the Swiss franc as a safe-haven currency.
• One macro factor: The Bank of England's recent decision to hold interest rates amidst mixed UK economic indicators signals a cautious outlook for the pound.
Range:
CHF/GBP is likely to hold within its recent range, reflecting stability but lacking strong upward momentum.
What could change it:
• Upside risk: A surprising shift in the Bank of England’s policy towards tightening could strengthen the pound.
• Downside risk: Continued political uncertainty or a move towards negative interest rates by the Swiss National Bank could weigh on the franc.
