GBP/CHF - the ratio of the British pound and Swiss Franc.

General information

GBP/CHF is the British Pound expressed in terms of a certain number of units of the Swiss franc. The base currency is in the numerator, the quoted currency is in the denominator. The base currency is assumed to be equal to 1 unit, while the quoted currency determines how much of it is in this unit. The spread is like this the currency pair is usually from 5 to 10 points, which is related to the calculation of the cross-rate through the dollar.

According to the latest data, having one British pound, we will get 1.19658 Swiss francs. The accuracy of the quotes depends if you are trading on Forex - from the broker, if you change at the exchange office-from the bank that performs the exchange.

Quotes of a currency pair have a number of features:

  • the first feature is the retention of the reduction vector of the exchange rate. Before and after the 2008 crisis, the downward trend continued.
  • the second feature is that the pair has the highest deviation of the course for one trading session. This happened against the background of the cancellation of the" binding " of the ceiling of the Swiss franc to the euro (the limit was 1.2). The wave of the fall affected all pairs that had the Swiss franc in their composition, causing a series of failures of brokerage offices that provide dealing services for trading Forex market currencies.
  • the third feature of the pair is that both countries were members of the European Union, without abandoning their currencies, when the other participants changed their national currencies to the euro.
  • the fourth feature is that the United Kingdom is no longer a member of this union. The vote to leave the EU, which went down in history as "Brexit", caused another collapse in the pair's quotes.

Additional information

Great contribution to the volatility of trading and during the activity of traders is made by the London Stock Exchange (LSE). One of the oldest European stock exchanges trades securities of international and national companies for the national currency – the pound sterling. Taking into account the exchange turnover of the LSE, which is equal to half of the world's securities turnover, it is able to change the balance of demand for the national currency. Another factor of direct impact on currency trading by the LSE exchange is the need for hedge currency risks on international stocks traded in parallel in national currencies.

The British pound and the Swiss franc are reserve currencies, which means the content of the countries ' gold and foreign exchange reserves in these securities. If the share of total world reserves held in the Swiss franc is small (no more than 0.3%), then the share of the pound is about 4%. "Behind the scenes" remains the question of what will happen if countries begin to revise their multi-currency baskets, taking into account the fall in the value of the pound against all world reserve currencies.

Impact of monetary policy

The monetary policy of the countries, which is carried out by the authorized bodies, affects the cost and demand for national currencies. In Switzerland, this issue is under the jurisdiction of the National Bank, in England - the Monetary Policy Committee. The activities of the Swiss Central Bank have more freedom in decision-making, which is enshrined in the country's Constitution, while the Monetary Policy Committee is limited by the framework of economic targets set by the government.

The rate level of the Swiss National Bank is set at the level of negative values, the asset is in demand among investors as a protective one, the bank is forced to struggle with the strengthening of the currency. The Monetary Policy Committee of England is more conservative on this issue, having lowered the rate to 0.25% just recently. The difference in interest rates affects the size of swap , credited to the trader for a part of the deposit that is in the transaction for more than a day for the pair in question. Information about the size of the swap is contained in the specification of the pair.

Other information

The British Pound is indicated by the symbol -£, the ticker code on the Forex market is GBP, the franc does not have a symbol designation, the ticker code is CHF.