GBPCHF: Appealing Carry-to-Volatility Dynamics

UBS maintains a positive outlook on GBPCHF, targeting 1.08 by mid-2027, driven by a 4% yield advantage and fading UK political uncertainty.

Key Takeaways

• 1.GBPCHF is viewed as the best carry-to-volatility trade in G10 due to a yield advantage of over four percentage points.
• 2.Recent UK political volatility following local elections is expected to be transitory and unlikely to cause lasting instability.
• 3.The forecast for GBPCHF is a trend higher toward 1.08 through June 2027, supported by strong UK economic momentum.

Table of Contents

• As sterling's political volatility fades, fundamentals reassert
• Yield advantage supports GBPCHF upside
• Investment considerations
• Appendix
• Risk information

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