Credit Agricole CIB Research likes long GBP/CHF exposure on the prospect of a Brexit EU-UK trade deal targeting a move towards 1.25.
"Our central case remains that a ‘bare -bones’ Free Trade Agreement (FTA) will be agreed between the UK and the EU. We continue to think that a trade deal is in the best interest of both the EU and the UK," CACIB notes.
"Subsequently, we think that there is a non -negligible risk that the UK and the EU will agree to a partial trade deal, focusing on the topics where the two sides can compromise. To the extent that this outcome nevertheless gives the Brexit saga a sense of finality, even a partial Brexit deal could propel the GBP higher across the board and especially vs overvalued and low -yielding currencies like the CHF," CACIB adds.