Credit Suisse & Natwest see GBPCHF buyers

The rationale is as follows:

  • The UK is in the first position in its vaccine race out of Switzerland and other European countries. This gives it a chance of topping the major economy recovery rankings for 2021.
  • The recent bout of GBP weakness against the USD at the start of April has been linked to a technical reversal of extended long positioning against funding currencies like JPY, CHF, & EUR rather than a more negative assessment of the UK economy.
  • Euro is tipped lower against the USD and the Euro by Capital Economics and Goldman Sachs who give ‘domestic vulnerabilities’ and Franc’s low yielding return as reasons.
  • The SNB will struggle to meet their 2% inflation target as the strong CHF has meant that Swiss imports are cheap.


One obvious area to take a GBPCHF long from is marked on the chart above.

The GBPUSD saw some decent buying into the end of last week and fundamentally the GBP still has reasons for strength. Over 50% of the UK has now got some COVID-19 antibodies and the vaccination programmes are progressing very quickly. The nine most vulnerable groups have now received at least one vaccine and that has resulted in much lower mortality and case rates out of the UK. You can see that in the last 7 days those testing positive has fallen by nearly 3.0%, deaths by nearly 30% and patients admitted by around 13%. The UK economy is now well placed to start using some of those £150 billion worth of savings accumulated during the lockdown months.

Trade Risk

May’s Scottish national elections is a risk for further calls for Scottish independence. However, the UK Gov’t should provide pretty stiff resistance to any notion of a second referendum.