Surprisingly orderly price action for the Swiss Franc considering all the fresh carry trade activity. Worries over the Chinese economy and the risk of overheating added to a strong data release out of Japan brought about a Yen revival and as the carry traders adjusted their exposure to the Japanese unit the Swiss was caught up in the low yields rally.
USD/CHF opened in London at 1.2020, edged up to 1.2045 before the market started to realign positions. The Franc firmed to 1.2015 and has been held tight around the 1.2020 level since. A heavy EUR/CHF mirrored the spot price action with opening highs of 1.6349, a dip to 1.6322 and then a recovery to and consolidation at 1.6335-40.
As the profit taking on the carry trade began to ebb the focus switched to the Swiss ZEW release. A surprise pick up in the sentiment indicator to -3.5 in April from -28 in March added further to the Swiss Franc's firming bias but was unable to shake the Market from a bout of sideways action. Still favour the CHF but nervous markets will keep Thursday ranges tight.
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