Swiss Franc Soars to Record Highs on Yen, Traders' Confidence Surges
The Swiss franc is experiencing a remarkable resurgence, with traders showing increased confidence in the currency. This bullish trend is its strongest since September 2022, with the franc reaching record highs against the yen this week.
On Tuesday, January 31, the Swiss National Bank (SNB) witnessed an unprecedented surge in demand for options on the Swiss franc, marking a new record. This growing interest is supported by traders' waning confidence in pricing negative interest rates in Switzerland. The franc's streak has been further bolstered by fading expectations for a hawkish Bank of Japan, which has contributed to its strength.
The Swiss currency has been on a roll, climbing for five consecutive days against the yen. On Wednesday, it reached a five-day high, buying 191 yen. Traders' bullish sentiment is reflected in one-month risk reversals, which indicate the most bullish stance on the franc in nine years. They are now betting on more gains for the Swiss franc against the yen, with renewed yen weakness also playing a significant role in the franc's ascendancy.
The Swiss franc's resurgence is evident, with record highs against the yen this week and unprecedented demand for options betting on a stronger franc. Traders' confidence in the Swiss currency is at its highest in nearly a decade, driven by a combination of factors including reduced expectations of negative interest rates and a weakening yen.
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