The downtrend continues. April is the twelfth month when the pound loses its position against the Swiss franc, although the franc is far from the strongest currency today. Despite a slew of bad indicators, investors are hesitant to invest in traditional safe assets, preferring the US dollar instead. Nevertheless, against the pound, the franc has a good chance.
The pound is under pressure due to the military confrontation between Ukraine and Russia, and the sanctions imposed against Russia. Despite its reduced reliance on Russian raw materials, the UK will face significant difficulties in exporting its products to the EU. which is facing economic problems in the new reality. The pound has already dropped to its lowest level in 15 months this week. The confrontation with Russia is already affecting the pace of economic growth and business activity in the UK, and retail sales in March decreased by 1.4%, significantly exceeding forecasts. According to economists, this is just the beginning, and the pound may become equivalent to the US dollar in the long run.
Switzerland has also suffered by being in Europe and joining anti-Russian sanctions. The Swiss index of investor sentiment in April fell to -51.6 pips against -27.8 in the previous month. The trade surplus in March fell from a record 5.5 billion CHF to 1.8 billion, which is the lowest in 3 years. The forecasts for the Swiss economy are also not very pleasant. Switzerland's reputation as a safe haven for foreign assets is now slowly fading. Nonetheless, the CHF maintains its lead against the pound in the currency war.
High volatility will continue next week. We will receive new reports on business activity in the UK, as well as data on unemployment in Switzerland. According to forecasts, Switzerland will still be able to maintain the lowest unemployment rates in Europe at 2.2%, but macroeconomic indicators in the United Kingdom will continue to deteriorate. In the current situation, we consider te deals to SELL to be the most effective, and the majority of technical analysis tools confirm our forecasts. Therefore, today we are opening the deals on the trend.
