BofA Maintains Optimistic Outlook on GBP/CHF for 2025

Bank of America (BofA) reiterated its positive outlook that the British Pound (GBP) will rise to 1.20 against the Swiss Franc (CHF) by mid-2025. The firm's forecast remains unchanged, emphasizing its optimistic stance on this currency pair for the next two years.

BofA's optimism continues despite the upcoming UK Consumer Price Index (CPI) data and the proximity of the exchange rate to the upper strike price of a type of options strategy used in trading known as the ratio call spread. The bank's position is influenced by various factors expected to support the GBP's strength against the CHF.

According to BofA, policy divergences and long-term optimism towards the GBP, along with the relative isolation of the UK’s services sector economy from potential global trade challenges, are the key elements underpinning its favorable forecast. The UK’s services sector is seen as a significant part of the economy and less vulnerable to disruptions in international trade.

Additionally, BofA suggests that the anticipated less restrictive fiscal policy in the UK could act as a buffer against economic shocks. This fiscal approach is expected to contribute to the resilience of the GBP and its potential appreciation against the CHF.

In conclusion, BofA's analysis indicates that a combination of supportive economic policies and the strength of the UK’s services sector is likely to elevate the GBP/CHF exchange rate by mid-2025.