Swiss Franc Set to Reclaim Haven Role, Options Trading Suggests

0yfugql2fkkkdjlnq3ltt6kn_media_dl_1.png Deutsche Bank, BloombergArticle content(Bloomberg) — The Swiss franc hasn’t been playing its traditional haven role of late, even as the war in Iran keeps geopolitics fraught. Options trading suggests the anomaly won’t last.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe currency has been tracking equities: rising alongside stocks on Wednesday and falling with them early Thursday. The franc and the S&P 500 have moved in tandem in seven of the past 12 sessions. At a time when investors might be expected to pile into the safest assets, one-week options show sentiment is the least bullish on the franc versus the euro since August. Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentBut looking out over the coming months, options pricing shows the highest demand compared with short-term contracts since August. That suggests traders are simply wary of holding the franc over the next few sessions due to expectations the Swiss central bank will step in to counter the currency’s gains. Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentTraders are positioning for the Swiss National Bank to lean against franc strength after officials reiterated their readiness to sell the currency at their March 19 meeting.

President Martin Schlegel reinforced that message last week, with the trade-weighted index sitting near multi-year highs.Article contentBeyond that, the franc’s haven role will likely reestablish itself given the heightened concerns around the Middle East, strategists at Goldman Sachs Group Inc. wrote. Article content“An explicit shift in the SNB’s intervention bias at the onset of the current energy shock has been key to the Franc’s underperformance in March,” strategists including Lexi Kanter wrote. “A similar pattern to the 2022 shock should apply this time around, with initial SNB-driven franc underperformance giving way to clearer euro-franc downside.”Article contentArticle contentWhat Bloomberg strategists say…Article content“The franc hasn’t consistently behaved like a haven currency since the conflict broke out, but its recent pullback must be seen in the context that it was hovering close to some of its strongest levels against both the dollar and the euro in the run-up to the war. The SNB may be active in the market.”Article content— Ven Ram, macro strategist. For the full analysis, click here.Article contentAt the same time, the franc has taken on characteristics similar to gold, which became as much a speculative trade as a haven during last year’s “Sell America” episode, when the metal saw exceptional demand and volatility, according to Tommy von Bromsen, a foreign exchange strategist at Svenska Handelsbanken AB. Article content“When investors pull back from risky assets, that partly means lowering speculative positioning — and that means selling the franc too,” he said.Article contentTrending U.S. targets Canada’s cloud-computing move as trade irritant Economy CRA denied taxpayer with multiple health issues the disability tax credit Personal Finance Snowbirds moving back home drives high demand for cottage properties Real Estate Bank of Canada worried about impact of oil shock on inflation during rate deliberations Economy U.S. within 'weeks' of oil shortages if war in Iran continues: Eric Nuttall Oil & Gas Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. U.S. targets Canada’s cloud-computing move as trade irritant Economy CRA denied taxpayer with multiple health issues the disability tax credit Personal Finance Snowbirds moving back home drives high demand for cottage properties Real Estate Bank of Canada worried about impact of oil shock on inflation during rate deliberations Economy U.S. within 'weeks' of oil shortages if war in Iran continues: Eric Nuttall Oil & Gas