A popular CHF carry trade is being unwound, boosting the Swiss franc and prompting market speculation about how much appreciation the Swiss National Bank (SNB) will tolerate. The franc's safe-haven bid strengthened in October amid European political turmoil, notably violent protests in France, eroding carry returns. The sell-CHF/buy-euro strategy's YTD cumulative return has fallen from 3.4% at end-September to 0.1% last week. CFTC data show asset managers trimmed CHF-short positions as carry att

A popular CHF carry trade is being unwound, boosting the Swiss franc and prompting market speculation about how much appreciation the Swiss National Bank (SNB) will tolerate. The franc's safe-haven bid strengthened in October amid European political turmoil, notably violent protests in France, eroding carry returns. The sell-CHF/buy-euro strategy's YTD cumulative return has fallen from 3.4% at end-September to 0.1% last week. CFTC data show asset managers trimmed CHF-short positions as carry attractiveness declined, but leveraged funds still hold large net CHF shorts; a reversal of those positions could add further upside pressure on the franc.