Bias: The GBP/CHF is bullish-to-range-bound, currently slightly above the 90-day average while positioned in the upper half of the 3-month range.
Key drivers:
- The Bank of England is signaling a cautious approach to interest rate cuts, which supports the British Pound.
- Swiss inflation remains low, allowing the Swiss National Bank to maintain its 0% policy rate, which can limit the Swiss Franc's strength.
- Ongoing global geopolitical tensions, especially related to US tariffs, are creating uncertainty in trade, affecting both currencies.
Range: The GBP/CHF is likely to hold within its recent range, with potential slight drifting due to mixed signals from economic data and central bank policies.
What could change it:
- An unexpected interest rate hike from the Bank of England could boost the GBP significantly.
- Any escalation in US-China trade tensions impacting the Swiss economy might weaken the CHF further.