Mitsubishi UFJ Analysts: Iran Conflict Could Weaken GBP Against CHF

According to Jin10, Mitsubishi UFJ analysts have indicated in a report that the British pound may weaken against the Swiss franc if the conflict in Iran leads to a further decline in risk appetite. They noted that as market focus shifts from the inflationary impact of rising energy prices to concerns over economic growth, risk aversion may intensify. This would put pressure on the pound, compounded by market worries about stagflation in the UK. In this scenario, these factors would outweigh the previous support for the pound from expectations of Bank of England rate hikes. Meanwhile, the relatively underperforming Swiss franc is expected to benefit from its safe-haven status.