UBS Analysis: What’s Keeping GBP/CHF Range-Bound Amid Central Bank Moves

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Key Takeaways:

  • 💰 UBS anticipates range trading in GBP/CHF in the near term
  • 🏦 SNB near the end of rate-cutting cycle, while BoE just started easing cycle
  • 📈 BoE expected to gradually reduce rates until end of 2025
  • ⏳ SNB likely to make final rate cut in September
  • 📉 GBP/CHF rates influenced by central banks’ timelines
  • 💷 Strong UK services inflation and economic data may moderate BoE rate cuts
  • 🔄 UBS predicts GBP/CHF to trade around recent levels with 1.11 as midpoint
  • 📊 UBS advises monitoring support levels at 1.07 and 1.06, resistance at 1.15 and May highs at 1.1670
  • 💰 The US Dollar’s modest recovery has led to a decrease in the Gold price (XAU/USD).
  • 📊 Lower interest rates are likely to support Gold as they reduce the opportunity cost of holding non-interest-paying assets.
  • 🌍 Geopolitical tensions in the Middle East may boost the demand for Gold as a safe-haven asset.
  • 🇨🇳 The People’s Bank of China halting gold purchases could impact Gold prices due to concerns about the demand for precious metals.
  • 📉 Gold price remains capped under an ascending channel but holds a bullish outlook supported by the 100-day EMA.
  • 📈 If Gold breaks through resistance at $2,530-$2,540, it could target the $2,600 psychological barrier.
  • 💼 Central banks are significant holders of Gold, with emerging economies increasing their reserves to boost perceived strength.
  • 🔃 Gold has an inverse correlation with the US Dollar and US Treasuries, making it an asset for diversification in turbulent times.
  • 📈 The price of Gold can be influenced by factors like geopolitical instability, interest rates, and the behavior of the US Dollar.
  • 💱 UBS predicts GBP/CHF to remain range-bound in the near term
  • 🏦 SNB near end of rate-cutting cycle, BoE just beginning easing cycle
  • 📈 SNB expected to make final rate cut in September, BoE to reduce rates quarterly
  • 🌐 Timing of central bank actions to influence GBP/CHF rates
  • 💷 Strong UK services inflation and solid economic data could lead to moderate BoE rate cuts
  • 📊 GBP/CHF expected to trade around recent levels with 1.11 as midpoint
  • 📉 Monitor support levels at 1.07 and 1.06, resistance at 1.15 and May highs at 1.1670
  • 💰 Swiss Franc expected to underperform US Dollar and British Pound
  • 📈 Barclays advises buying EUR/CHF before Thursday’s SNB Rate Decision
  • 📅 Market update includes Nvidia’s re-entrance and Dollar struggles

UBS Anticipates Range Trading in GBP/CHF While SNB and BoE Navigate Rate Cycles

UBS, a leading financial institution, has projected range trading in GBP/CHF in the coming months. This prediction comes as the Swiss National Bank (SNB) nears the end of its rate-cutting cycle, while the Bank of England (BoE) has just initiated an easing cycle.

The BoE is expected to gradually reduce rates until the end of 2025, with SNB likely to make its final rate cut in September. These central bank actions will play a crucial role in influencing GBP/CHF rates, with timing being a key factor to watch.

Strong UK services inflation and robust economic data may temper BoE rate cuts, while GBP/CHF is predicted to trade around recent levels with 1.11 as the midpoint. UBS advises monitoring support levels at 1.07 and 1.06, as well as resistance at 1.15 and May highs at 1.1670.

In the realm of commodities, the US Dollar’s modest recovery has led to a decrease in the price of Gold (XAU/USD). However, lower interest rates are expected to support Gold as they diminish the opportunity cost of holding non-interest-paying assets. Geopolitical tensions in the Middle East could boost the demand for Gold as a safe-haven asset, despite concerns about the People’s Bank of China halting gold purchases affecting prices.

Overall, Gold remains capped under an ascending channel but maintains a bullish outlook supported by the 100-day EMA. Central banks continue to hold significant Gold reserves, with Gold serving as a diversification asset in turbulent times due to its inverse correlation with the US Dollar and US Treasuries. Factors such as geopolitical instability, interest rates, and US Dollar behavior are key drivers of Gold prices.

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