CHF/GBP Outlook: Likely to move sideways, given the rate is near its 90-day average and lack of strong drivers for change.
Key drivers:
- The Swiss National Bank has maintained a 0% policy rate amid low inflation, while the Bank of England plans cautious rate cuts, creating a stable environment for both currencies.
- Ongoing US tariffs are pressuring the British Pound, which could weigh on export activity, impacting the UK's growth outlook and potentially increasing demand for the Swiss Franc.
- The UK's GDP growth is projected to slow, influenced by stagnant household incomes and global trade tensions, which may hinder Sterling’s performance.
Range: The CHF/GBP rate is expected to hold within its recent stable range, with no strong incentives to test extremes.
What could change it:
- Upside risk exists if the Swiss Franc's appreciation prompts the SNB to consider negative rates, potentially increasing demand for the currency.
- Downside risk could arise if the UK's economic outlook improves significantly, boosting confidence in the Pound.