The current market bias for the CHF to GBP exchange rate is bearish. Key drivers include the interest rate differential, as the Swiss National Bank cut its rate to 0.5% amid easing inflation, while the Bank of England is projected to reduce rates to 3.25% as UK inflation declines and growth slows. Additionally, ongoing trade tensions, particularly the significant U.S. tariffs on Swiss exports, are negatively impacting the Swiss economy.
The near-term trading range is expected to be stable, with fluctuations remaining modest as the rate trades around its three-month average.
An upside risk could arise if the Swiss Franc's strength prompts the SNB to introduce negative interest rates to support economic growth. Conversely, a downside risk could occur if the UK economy shows unexpected resilience, leading to less aggressive cuts from the Bank of England, thus lending support to the pound.