Like many investors, Mr. Bolz’s firm had a bet against the franc in its portfolios, which lost money on the currency’s sudden surge. It hasn’t made any meaningful bets on moves in the currency in the last few months, he said.
An uneasy calm has emerged as investors show more caution. Volatility has all but disappeared. The franc has settled into a new holding pattern at around 1.05 francs per euro, and its moves against the dollar largely have tracked changes in the euro-dollar exchange rate.
Because banks see the currency as riskier than they used to, the cost of trading the franc has risen by about 40% since the cap was removed, according to ITG, a broker that analyzes the cost of currency transactions.Daily trading volumes in the last three months, after the turmoil subsided, are down by roughly a third compared with the same period last year, according to UBS AG.
“Risk managers have question marks with the Swiss franc. They can’t really model it after the jump early in the year,” said Richard Benson, co-head of portfolio investments at Millennium Global Investments, a London-based currency manager with $13.4 billion of assets.
Doubts over how risky the franc is, coupled with uncertainty over Greece’s debt talks, have deterred Mr. Benson from betting the currency will fall, he said.
More here – The Wall Street Journal
