The franc's struggles this month is a welcome relief for the SNB
USD/CHF rises to its highest level in more than two years
As a whole, the pair is up by 2.3% in the month of April with the swissie being the worst performing major currency so far this month. On the day, the franc is also the weakest performer as the technical breaks in USD/CHF and EUR/CHF are continuing to help aid buyers in their quest for a move higher.
I can't see much other reason apart from flow-related plays that is helping to drive the move in the franc with Bloomberg attributing the decline in the currency to traders preferring the yen as the go-to haven currency.
It's not something I can quite deny as since January 2015, the franc has lost much of its allure to currency traders around the globe. If you're looking for a haven play, there's the yen which is more preferred. If you're looking for a funding currency to trade against, there's the euro which is more preferred too.
Whatever the case is, the technical breakout here could suggest further room to run since a weaker franc will sit well with the SNB. And it is a much welcome relief as well after EUR/CHF threatened to follow through with a 20-month low break at the end of March.
Instead, the pair has now climbed back up towards the 1.1500 level as option traders are also siding with further weakness in the franc. One-year EUR/CHF risk reversals have now jumped up to its highest level since May 2017 and that suggests that option traders are seeing more scope for swissie weakness in the year ahead.
I can't point to much else that is driving the move lower in the swissie today aside from technical breakouts and out-of-favour flows in the currency. For me, the swissie has been a real enigma ever since the January 2015 incident for reasons stated above. But if there's one thing all currency traders can agree on, is that when the charts start to see a bullish breakout like that, there's no point trying to argue against it.