July 24, 2024 09:41 GMT
SWITZERLAND: CHF Catches Up With JPY as Carry Trade Reversal Dominates
SWITZERLAND
- CHF playing catch-up with JPY in recent trade, joining the currency among the best peformers in G10. The move started in earnest at the European open, evident in CHF/JPY's rally off the base at 173.27, and like the JPY is most notable against growth-, risk- and commodity-proxy currencies.
- The currency will be benefiting from the reversal in carry trade dynamics following BoJ intervention, with CHF's status as a funding currency mirroring that of the JPY. This countered any dovish impact from the early bid in Euribor, which lent itself to a new contract high print at 99.155 in the Dec-24 SARON future - signalling that rate expectations are not the driver of the current spot move.
- NZD/JPY was a focus in late Asia/early Europe trade on several technical breaks - NZD/CHF is following suit with the break of the bear trigger at 0.5282, the mid-April low. Next level of note in EUR/CHF crosses at the 0.9603 200-dma.
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