The rates continue within a flat trend. This is a very rare occurrence for the GBP/CHF. The last time this happened was about 3 years ago, during a pandemic, but now the situation is completely different. We must pay tribute to the Swiss franc: this currency has proved to be a real safe asset, maintaining its value steadily in the confrontation with the highly volatile risky pound. Over the past 10 months, since the formation of the trend, quotes have changed within 5%, in the range of 1.10235 - 1.1572, and even less since the beginning of 2023. How to earn on the rates in these conditions?
This week, the Swiss franc managed to strengthen against the pound thanks to disappointing macroeconomic reports in the UK. Investors recorded a horrendous fall in the indexes of business activity and consumer confidence in July, and below-expected inflation reduced the likelihood of an increase in the interest rate. As we can see, this had a negative impact on the value of the pound, but these factors can be considered short-term.
Volatility should increase for the GBP/CHF next week. Complete calm, which is the sixth trading day in a row, will definitely be completed. The focus of investors will be inflation in Switzerland, as well as a meeting of the Bank of England on the interest rate. Given low unemployment, but the highest among the G-7 countries, inflation, the Bank of England may raise the rate to keep up with the Fed, or at least plan to raise the next time. Most of the technical analysis tools indicate the effectiveness of the Buys in the near future, so today we are investing in the pound.
