CitiFX enters short GBP/CHF trade after BoE, SNB decisions, targets 1.05
Reuters
Published Sep 22, 2022 14:44
Updated Sep 22, 2022 16:18
LONDON (Reuters) -CitiFX has entered into a short position in the British pound against the Swiss franc following the Bank of England's and Swiss National Bank's latest policy announcements.
In a note published on Thursday, CitiFX said its strategy call was for shorting GBP/CHF at 1.11 francs, targeting a move to 1.05 and with a stop-loss above 1.14, allocating 10% of their portfolio capital.
The Bank of England, on Thursday, raised its key interest rate by 50 basis points to 2.25%, which the Citi note said was "not supportive of sterling", as market pricing had indicated a chance of a 75 basis point increase
The Swiss National Bank raised interest rates by 75 basis points to 0.5%, ending the country's seven-and-a-half year experiment with negative rates. Some investors had expected a more aggressive 100 basis point hike.
The franc tumbled after the SNB's move against most major peers. The pound was last at 1.1031 francs, and Citi said the trade was also "to take opportunity of today’s sharp rally".
Sterling has lost 10% of its value against the franc so far this year.
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Written By: Reuters
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