The pair is higher today
The MUFG trade of the week is at a discount today with GBP rebounding and the Swiss franc at the bottom of the G10 pile.
They recommend selling the pair with a target at 1.19 and a stop at 1.2550.
"We are recommending a short GBP/CHF trade idea. We believe that risks for the GBP remain to the downside in the near-term. Firstly, we expect real yields in the UK to remain under downward pressure after the BOE stuck to plans to raise rates only gradually," MUFG noted.
"The CHF should contineu to benefit as well from building concerns over higher inflation. THe CHF has proven to be a better store of value over the long term," MUFG writes.
The chart certainly paints a compelling picture:
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