Bias: bullish-to-range-bound, with GBP/CHF above the 90-day average and in the upper half of the 3-month range, supported by a still-wider rate gap and cautious UK policy stance.
Key drivers:
- Rate gap: BoE remains on a higher-rate path than SNB in the near term, supporting GBP versus CHF, even as UK inflation cools and policy makers tread carefully, supported by resilient UK data.
- Risk appetite: firmer global demand tends to temper the franc's safe-haven bid, helping GBP/CHF as investors chase yield, with positioning leaning toward GBP.
- Macro factor: eurozone growth may surprise to the upside, reducing CHF strength.
Range: GBP/CHF is likely to drift within the 3-month range, testing the upper end as it consolidates near recent highs and awaits new UK or eurozone data.
What could change it:
- Upside risk: eurozone growth proves stronger than expected, further limiting CHF strength and lifting GBP/CHF amid ongoing policy expectations.
- Downside risk: SNB signals negative rates if the franc remains strong, which would push GBP/CHF lower and encourage more franc demand.
