The uptrend continues for the third month in a row. At the moment, the value of the pound against the CHF has reached its highest level in 12 months, and it may well continue to grow. At the same time, most technical analysis tools signal about the rate being in the overbought zone. Therefore, a retreat from the highs in the near future is very likely. Moreover, there are enough factors that put pressure on the pound and other risky assets.
This week, the key event for investors was the meeting of the Bank of England, which left monetary policy unchanged and assessed a positive perspective for economic growth. At the same time, it was noted that the regulator is not ready for a negative rate and this is not yet necessary, despite the fact that the economy continues to function under strict quarantine restrictions. The BoE might reconsider the necessity of the negative rate in six months.
Reports on the business activity published this week showed an increase in January, excluding the PMI index in the construction sector. In the neighboring EU, there is also an increase in business activity and GDP growth. The situation with the pandemic seems better reflected on the value of the pound than other currencies, as vaccination in the United Kingdom is progressing at the most active pace.
There were no macroeconomic reports from Switzerland during the week. Therefore, the value of the CHF changed only under the influence of external factors. Perhaps next week the situation will change with the publication of unemployment data in Switzerland. Also, the publication of the UK GDP for the fourth quarter is expected next week. At the moment, we believe that the deals to BUY will be the most effective in the long term, although we do not rule out a small price correction before reaching new highs.
