According to Jinshi Data, Goldman Sachs recommends shorting the Swiss franc against the pound sterling on the grounds that the Swiss National Bank may cut interest rates or intervene directly to prevent the Swiss franc from rising too quickly due to safe-haven capital flows.
Goldman Sachs currency strategists Michael Cahill and Lexi Kanter recommend going long on GBP/CHF with a target of 1.16 and a stop loss of 1.10.
Based on SNB sight deposit data and “context clues from the SNB’s past behavior,” the SNB may have intervened to curb the franc’s rapid rise.
With the Federal Reserve likely to need to cut interest rates faster and deeper to stabilize economic growth, policymakers in Switzerland and Japan may need to adjust their policy strategies to offset the impact of higher safe-haven currencies.
