An update from 10 Downing Street that Prime Minister Boris Johnson is responding to treatment in intensive care helped lift sentiment towards the British pound.
Uplift in global risk sentiment that saw Wall Street open higher and European shares reverse early losses kept a lid on demand for Swiss francs.
GBP/CHF was down by 85 pips (+0.71%) to 1.2035 with a daily range of 1.1949 to 1.2035 as of 3pm GMT.
The currency pair had been meandering under 1.20 but shot higher mid day in Europe back above the key figure and taking weekly returns into the positive at +0.33%.
Pound rises as Boris Johnson responds to treatment
The pound turned moderately higher against the Swiss franc by Wednesday afternoon but remains off the one-month highs reached at the end of last week.
News that Prime Minister Boris Johnson was responding to hospital treatment was welcomed by FX traders as an indication of reduced UK political uncertainty. Although Dominic Raab has stepped up to take the helm in Johnson’s absence, there is still a lingering concern about a power vacuum at the top of the UK government.
The Prime Minister won a powerful mandate as leader of the party and then as Prime Minister in December’s election. Raab doesn’t command that same level of support, making disagreement and indecision in the cabinet more likely.
Swiss franc lower as Bernie Sanders drops out of US Presidential race
Stock markets jumped in the afternoon and demand for havens fell further when Bernie Sanders announced he will drop out of the race to become the President of the United States. Given the historic market turmoil in March, the Swiss franc has been acting as a safe haven in times of uncertainty.
Bernie Sanders is an admitted socialist which of course chars against the stock market as the ultimate capitalist institution. Sanders is generally viewed by stock market investors as anti-business and likely to raise corporation taxes to the detriment of shareholder returns.