The GBP/CHF currency pair held near a 6-week high of 1.0668 on Tuesday, following an agreement between Iran and Israel to suspend reciprocal attacks, easing demand for traditional safe-haven assets such as the Swiss Franc.
The de-escalation followed an appeal by US President Donald Trump and has lifted market sentiment, with investors viewing it as an opening for broader peace talks to progress.
Still, the Franc’s downside risk appears restrained by doubts over the durability of the ceasefire in the Middle East. Israeli Prime Minister Benjamin Netanyahu cautioned that the conflict with Iran and Hezbollah “has not yet ended,” while asserting that both adversaries are now in a weakened position.
On the data front, Switzerland’s CPI inflation registered 0.6% for May, below the 0.8% market consensus. The weaker-than-expected figure has diminished prospects of any near-term rate hike by the Swiss National Bank.
At the same time, the UK economic calendar has been relatively quiet so far this week. Market participants are now looking ahead to Manufacturing Production and the monthly Gross Domestic Product data scheduled for release on Friday, which could provide fresh direction for Sterling.
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