GBP/CHF trading insights: factors, trends and forecast

Navigating currency trading can be challenging yet rewarding. This is especially true when exploring currency pairs like the British Pound Sterling (GBP) and the Swiss Franc (CHF). The GBP/CHF pair has been known for its stability in the past, showing the strong economies of both currencies, but current economic changes and global tensions are promising to change that. 

Let’s talk about some of the factors influencing this pair in 2025 and the key forex trends around it.

What is the GBP/CHF currency pair?

The GBP/CHF currency pair represents the worth of one British Pound against the Swiss Franc. Many forex traders worldwide closely pay attention to this pair because it delivers a unique mix of stability and variability, creating several trading opportunities depending on the market conditions.

While the Pound represents one of the world’s leading economies, Switzerland’s Franc serves as a renowned safe-haven currency.

Currently, the GBP/CHF exchange rate stands at approximately 1.14062 CHF. Known for reflecting broader economic trends, the GBP/CHF pair is a great representation of the economic strengths and struggles of both countries, but also of the events that happen around the globe.

Factors affecting GBP/CHF value

Let’s dive into the factors influencing the GBP/CHF pair. Each plays a key part in setting its recent variations.

UK economy state

The United Kingdom faces inflation problems. Recent figures put it above 6 % and it keeps the Pound under strain. The Bank of England increased interest rates to manage inflation, yet there are predictions of a possible slowdown. Current figures show a minor increase, which creates market doubt. The GBP has continuous difficulties in the current climate.

Swiss economic stability

Switzerland’s financial system has a solid base, even given global events. Swiss inflation information exhibits reasonable figures when measured against other European nations. This stability is drawing investors to the CHF, mostly due to the current global market conditions.

Geopolitical Events

The key geopolitical events now impacting the GBP/CHF currency pair include:

•             The GBP/CHF has been affected by uncertainties related to Brexit. Unresolved trade deals and talks about the Northern Ireland protocol have negatively affected the Pound.

•             Tensions tied to the Russia-Ukraine conflict have lifted demand for the CHF. Because of its perceived safety, this situation puts downward force on the GBP/CHF.

•             The recent news from the U.S. Presidency to put in place new tariffs have raised worries about world economic growth. These actions may hurt global trade. They could lead to higher prices and slower economic activity.

•             The German election occurred on February 23, 2025. Friedrich Merz’s CDU/CSU secured around 28.5 % of the vote. This result has begun a period of political uncertainty. Coalition talks are in progress to build a stable government. These developments can alter European market actions, which may affect currency pairs like GBP/CHF.

Commodity market volatility

Changes in world commodity markets, for example, in oil and gas prices, have affected the GBP. The UK relies on energy imports to some degree. Significant increases in energy costs have made inflation and economic uncertainty greater. This hurts GBP value compared to the CHF.

Correlation with other pairs

GBP/CHF has a link to pairs such as GBP/USD and EUR/CHF. Shifts in GBP/USD, because of changing US indicators and Federal Reserve plans, influence GBP sentiment. That same sentiment then impacts GBP/CHF.

The CHF’s strengthening against the Euro (EUR/CHF) amid Eurozone economic uncertainty is also bolstering CHF value and, by extension, affecting GBP/CHF dynamics.

Recent financial news relevant to GBP/CHF

Below are some of the most recent financial developments impacting the GBP/CHF pair:

•             The latest UK CPI, which indicates elevated inflation, has negatively affected investor confidence in GBP.

•             The SNB is forecast to lower its policy rate by twenty-five basis points to 0.25 % in March 2025. This action is expected because of subdued inflation, which was 0.3 % in February, the lowest reading in almost four years. This action intends to aid the Swiss economy. The ongoing strength of the CHF is still a worry since it might affect how well exports compete.

•             The BoE will likely keep its present interest rate at 4.5 % at the next meeting. Internal demands are rising for possible rate decreases to tackle the faltering UK economy, which shrank in January. Policymaker Catherine Mann has pushed for a rate decrease of fifty basis points, pointing out domestic economic issues. The expectation of such a move may weaken the GBP.

Current state of the GBP/CHF pair

At the moment, GBP/CHF is experiencing a lot of volatility. Factors such as the UK economy, Brexit and geopolitical uncertainty across Europe are putting the Pound under pressure.

On the other hand, the CHF stays strong. Current world financial issues and raised political dangers have made the Franc stronger in a major way. This is putting force on the GBP/CHF pair to go down.

The Swiss National Bank (SNB) was the first big central bank to lower interest rates last year. Right now, the SNB’s key policy rate stands at 0.5%.

Inversely, interest rates in the U.S. are between 4.25% and 4.50%. In Britain, it’s about 4.75%, and in the euro zone, it’s at 2.5%. Because of this, the Swiss franc is very strong right now. It’s at its highest level in eight months against the dollar and at its strongest in nine years against the euro.

Short-term forecast for April

Based on the present financial measures and the world political state, it is predicted that the GBP/CHF pair will see some movement during April 2025. Experts foresee this pair will trade in a range from 1.1300 up to 1.1500.

A possible high could be near 1.1450. This projection considers the BoE’s potential rate decisions and ongoing global trade tensions influencing investor sentiment.

GBP/CHF forecast for 2025

For the entire year of 2025, forecasts suggest that the GBP/CHF pair could range between 1.1200 and 1.1600. A median value of approximately 1.1400 is expected by the end of the year. These projections are based on anticipated monetary policies from both the BoE and SNB, as well as the broader economic recovery in Europe.

To sum up

The GBP/CHF pair faces difficult times. Economic problems trouble the UK, but Switzerland shows more balance. The Pound may suffer because of inflation and world affairs. The CHF remains a secure investment.

Traders should watch for central banks actions, financial information, as well as global risk sentiment when investing in this currency pair. Seasonality may have an impact on trading behavior, too.

For example, large investors and hedge funds sometimes change their holdings based on goals for quarterly and yearly performance. This can affect the flow of money between currencies.

Adaptability and an awareness of basic economics and short-term market changes are crucial. By being knowledgeable and going along with the circumstances, traders can strategise when they deal with this currency pair.

Disclaimer: This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.