GBP/CHF Outlook:
The GBP/CHF is likely to decrease as it is currently below its 90-day average and near recent lows. Political uncertainty in the UK is adding pressure on the British Pound.
Key drivers:
• Rate gap: The Bank of England’s dovish stance contrasts with the Swiss National Bank maintaining low interest rates, which supports the CHF's strength.
• Risk/commodities: The significant appreciation of the CHF, driven by safe-haven demand amid global uncertainties, continues to pressure the GBP/CHF pair.
• One macro factor: Political instability in the UK, especially surrounding the Labour Party leadership, is creating volatility in the Pound’s outlook.
Range:
Expect GBP/CHF to remain stable within its recent range as it tests recent lows but faces headwinds to recover.
What could change it:
• Upside risk: A significant improvement in UK political stability could bolster the GBP.
• Downside risk: Further negative developments in UK political leadership may exert additional downward pressure on the Pound.
