GBP/CHF Forecast Today 13/01: GBP Weakens Vs CHF (Chart)

(MENAFN- Daily Forex)

• The British pound has fallen on Friday after initially tried to rally against the Swiss franc, and on early Monday, we have seen a continuation of the previous action.
• That being said, it'll be interesting to see how things play out here due to the fact that we are at the bottom of a very obvious consolidation area, and therefore I think you've got a scenario where you could see a bounce, but we would need to see some reason for that to happen.

United Kingdom Budget Concerns

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There are a litany of reasons why the British pound is falling against currencies around the world, but the first one comes down to the budget that traders do not like. This is a market that I think will continue to see downward pressure over the longer term, and of course the fact that we now have a lot of political chaos in the Labour Party doesn't help. Investors are starting to look at the United Kingdom as a complete mess, and perhaps even an authoritarian mess when it comes to free speech, so it's not exactly the first place you want to invest in when police are knocking on doors to investigate Facebook posts.

At this point in time, the 1.11 level is an area that if it gets broken, the British pound will plunge to the 1.10 level. This makes quite a bit of sense, because Switzerland is considered to be a safety currency, while the British pound is not. The fact that the budget is the same one that had been turned down previously shows just how unserious the British are about budgetary concerns, and the markets are making them pay for that. The 10 year GILTS seen a large rise in the yield, and while that typically would be a sign of strength for the economy, it's the fact that they are being sold off due to traders not believing in the UK is a horrible situation for the British to be in.

EURUSD Chart by TradingView

The British have the ability to turn this around, but the question is whether or not they have the will. As things stand right now, the British pound will more likely than not continue to be one that gets sold off as far as currencies are concerned.

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