Prime Minister Boris Johnson left intensive care on Thursday evening, helping the pound eek out gains across most of the FX space on Friday.
Many global stock and bond markets are closed for Good Friday and currency flows are significantly lower than usual. This week the S&P 500 saw its best weekly gains since the 1970s, an environment that doesn’t suit the haven status of the Swiss franc.
GBP/CHF was up by 19 pips (+0.16%) to 1.2044 as of 3pm GMT.
The currency pair pulled back from overnight high around 1.208 to hover in a 20 pip range above 1.203. The gains add to a narrow +0.04% rise on Thursday and leave the exchange rate with Week-to-date gains of +0.36%.
Pound gains as PM leaves intensive care
UK Prime Minister Boris Johnson moving out of intensive care helped the pound rise against the Swiss franc on Friday. The Prime Minister will likely still be receiving treatment in hospital for several days so in his absence, Foreign Secretary and deputised leader Dominic Raab announced the extension of the UK lockdown for another three weeks, in a widely expected move.
Most market participants viewed three weeks of lockdown as insufficient to control the spread of the virus and had already priced in a longer period of economic inactivity, not just in the UK but in Switzerland too.
Swiss franc drops as stock markets have best week in 3 decades
The Swissie has pulled off weekly lows against the pound but remains under pressure. The risk on flavour in markets over the last week has hurt demand for havens like the franc.
US stock markets have been leading global markets higher. In this shortened holiday week, the S&P 500 rose 12.1% for its best weekly return since 1974. The Dow Jones rose even more by 12.7% for one of its best weekly gains on record.
In Switzerland, the government has forecasted a ‘worst-case scenario’ where GDP falls -10% this year because of the negative impact of the coronavirus.