UBS: Government Can Keep UK Fiscal Concerns In Check, Buy GBP/CHF Near 1.08 - Exchange Rates UK

What the desk is arguing

UBS's latest commentary suggests that the UK government can maintain fiscal stability, effectively alleviating concerns surrounding public finances. Their analysis drives a constructive stance on the GBP/CHF, advocating for buys near the 1.08 threshold as a strategic entry point.

Supporting their thesis, UBS points to recent government measures that have demonstrated a commitment to fiscal prudence, which they believe is likely to reinforce the pound, particularly against safe-haven currencies like the Swiss franc. This viewpoint implicitly counters the idea that ongoing fiscal worries should inherently weaken the GBP./CHF exchange rate.

Where it sits in our coverage

Our consensus target for GBP/CHF currently stands at 1.075, reflecting a balanced outlook amid ongoing market conditions. This view aligns with UBS’s recommendation to buy near 1.08, which is within a reasonable range of our consensus but highlights a slightly more optimistic stance on the pair.

Specific firms in our coverage base share varying views on GBP/CHF. Notably, the following targets were noted:

• Barclays: 1.09 (Mar-26)
• Deutsche Bank: 1.08 (Mar-26)
• JPMorgan: 1.10 (Mar-26)

How other firms see it

Other market participants exhibit mixed sentiments towards GBP/CHF. While some align with UBS's bullish outlook, others remain cautious due to underlying economic uncertainties.

• Goldman Sachs: aligned
• BofA: contrary

This divergence suggests a nuanced market where opinions on fiscal management and its potential implications for currency trajectories vary widely.