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Will CHF/GBP Be a Good Currency Pair for Investment in the Future?

Trade between the UK and Switzerland is robust these days and it’s not going to get any worse for a long time. Even with the economic turmoil resulting from Brexit, the trade between these two countries was set to stay strong due to the special deal signed by them in 2019. As the situation stands now, trade agreements are solid, so these business relationships should only strengthen. Of course, this means there will be an increase in the volume of FX trade on the GBP/CHF pair. And the demand for ways of transferring money from Switzerland to UK cheaply and efficiently will continue to increase.

If it’s the FX trade that interests you most, now is a good time to look into choosing this particular pair of currencies. It currently allows for some volatility and yet the political and economic situations enable experienced traders to make rather accurate predictions.

The Swiss Franc and Pound Sterling: Current Standing

To see where these currencies are going in the future you need to understand what their current positions are. For the longest time, GBP has been considered one of the best currencies for investment due to its stability. It’s been up there on par with the USD. However, Brexit had a big impact on the Pound’s position on FX trading markets.

The Brexit announcement resulted in a rapid and unexpected fall of the Pound Sterling to a record low in 2016. The situation for the currency improved since that time, which reflected on the UK economy. However, despite the increasing stability, GBP currency pairs moved to the “volatile” category. The good news is that the Pound is showing a stable trend of gradual strengthening.

The bad news is that the matter of Brexit is still a prevalent economic and political concern. Therefore, that volatility is unlikely to change because the risk of some big changes “out of nowhere” is rather high.

While Pound Sterling was climbing off its prime investment currency pedestal, Swiss Franc has been doing the exact opposite. Slowly but steadily it has become one of the best investment currencies in the world. It’s been developing similar to the Swiss economy as a whole. It’s rather slow-paced, but it’s growing steadily and long-term prognoses show that this won’t change.

Moreover, due to the unique political and economic positioning of Switzerland, it’s currently one of the least risky investment countries and currencies in Europe. It’s due to the instability of the surrounding countries that the Franc was able to shine. Today it’s valued for the security it offers as an FX investment.

CHF/GBP Investment Predictions

According to the latest predictions, the CHF/GBP currency pair is a good option for long-term investments because of the steady strengthening of the Franc. However, it’s not the best option if you want to make good returns fast. This currency pair is volatile, but its volatility level isn’t extreme. This means that it’s hard to catch that moment when you can get a fantastic deal.

For all the shocking impact of Brexit and its ripple-effect impact on the EU economy as a whole, the Pound isn’t crashing. True, it’s weakening and will, most likely, continue to do so. However, it’s not fluctuating dramatically, mostly because it’s such a highly secure currency.

The Franc has even fewer reasons to exhibit extreme changes. Therefore, investors who prefer risk and rewards of extremely volatile FX combinations should choose exotic currencies instead. This pair is what you want to invest in to secure a part of your fortune for years.

However, you also need to understand is that the CHF/GBP pair is extremely sensitive to global political and economic changes. It’s not only the countries’ internal policies and trade agreements between them that can affect the currency value dramatically. For these currencies, any major event that happens in the world might have a huge impact.

For example, the US-China trade war affects the CHF/GBP exchange rates, and it will continue to do so. Another issue that’s affecting global trade as a whole is the recent coronavirus outbreak. It caused panic and greatly affected one of China’s industrial centers. With the production in many businesses down, China suffered great losses. The same goes for millions of businesses that relied on these products.

As such, the global economy is affected at the highest level. As a result of that, investors are looking form some kind of stability and positive prognosis. The CHF/GBP trading offers it despite the turmoil now. However, you also shouldn’t forget that this situation might change dramatically. You never know when another outbreak of some unknown disease or some other emergency happens. But when it does, the global economy will suffer and so will the CHF/GBP trading opportunities.

Should You Invest in CHF/GBP Trading?

The final decision is, of course, yours to make. However, one cannot argue that this currency pair is one of the good choices for FX traders. It’s volatile, but not too much, and it has some very good long-term predictions. The growth on investment for this pair isn’t too big, but it’s steady and reasonably secure.

Therefore, if you are looking for some security, you should consider buying some Swiss Francs right now. It’s trickier with the Pound Sterling because Brexit is still affecting it. However, with the did actually done now, one might expect it to strengthen gradually. The floundering Euro is a contributor to that.

In the meantime, the UK economy will remain volatile and unstable for some time, despite the deals signed upon Brexit. This is an expected turmoil because the country needs to settle into its new situation. On the macroeconomic scale, this might take a couple of years. During this time, those more daring of FX investors might try to reap some benefits from the Pound’s volatility.

Overall, the prognosis for the CHF/GBP pair is quite good, albeit a long-term one. It’s prudent to consider your current investment portfolio before you try to expand into this pair. You might consider using the Franc as a reserve currency as well. It’s highly likely that it will continue strengthening in the light of growing global economic instabilities.

Kate Bregovic has been working in the financial planning and investment services industry for over 10 years. Now being a freelance writer, she is well equipped to provide advice on a wide array of areas. Follow her on Facebook!
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