The main drivers impacting on the Swiss Franc in the short-term are the European Central Bank (ECB) policy meeting on Thursday and general global risk trends.
The ECB meeting could impact on the Franc if it leads to a sharp fall in the Euro as the Swiss authorities will want to prevent too much of depreciation against the Franc so as to protect Swiss exporters.
This tends to be why the Swiss National Bank (SNB) policy usually follows ECB policy.
The consensus expectation amongst economists is that the ECB will ease policy on Thursday but there is much debate about the extent to which it will ease.
If it is aggressive and announces a revival of quantitative easing – the printing of money to hoover up assets such as corporate and government bonds – the Euro is likely to weaken. In such a scenario the SNB will probably follow suit with further easing or direct intervention in order to try and keep the CHF and EUR closely aligned. The Swiss economy tends to struggle when its currency becomes elevated relative to the likes of the Dollar and Euro, as Swiss exports are priced out of the global market.
This is likely to weaken the Swiss Franc across the board, including against the Pound, leading to gains for GBP/CHF. (FOR THE LONG THERM)
GBP/CHF SHORT (Sell)
ENTER AT: 1.22580