The Swiss franc may be in the yen’s shadow when it comes to being the haven of choice in foreign-exchange markets, but the Japanese currency may soon get a run for its money.
Traders look more willing to go long the franc after the Swiss National Bank kept its language about the currency’s strength unchanged, and could build on positions should expectations for looser Federal Reserve policy increase. 
The Fed meets next week and investors are on the lookout in case US policy makers signal that the first interest-rate cut in more than a decade is in the cards for their July decision.
The Swiss currency advanced on Thursday after SNB President Thomas Jordan kept his description of it being “highly valued” as some investors were positioned for stronger language. With no sign of higher intervention risks, history on the side of bulls in times of Fed easing and ongoing Brexit uncertainty, franc appreciation may be on the way.
The Swiss currency’s haven appeal saw it rise against all major peers except Japan’s in the past three months as trade tensions deepened the global economic gloom. 
Given geopolitical and trade concerns aren’t seen receding any time soon, the trend may remain and even get stronger as the SNB doesn’t seem in any kind of panic over the franc’s strength or volatility.
This would in theory support the use of the franc as a hedge for investors looking to take cover for Brexit developments, especially those that have lately gone long the euro. Leveraged accounts have steadily trimmed their euro shorts since early May, while asset managers still hold a long net exposure, according to CFTC data.
Such positioning could be tested as soon as Monday as European Central Bank officials start their annual gathering in Sintra, Portugal. Comments by President Mario Draghi will be closely watched, especially as the euro gained 1.4% on the day following his remarks on inflation at the event in 2017.
The currency trades near the middle of its range versus the dollar since September as charts suggest further gains are possible. A bearish short-term moving-averages crossover makes case for dollar-franc to weaken by 1.3% towards 0.9807, a key Fibonacci retracement level.
This comes at a time when options traders remain strongly in favour of the franc’s prospects.
Over the one-year horizon, the Swiss currency enjoys it’s the most bullish sentiment in 14 months versus the greenback while it steadily narrows the gap over the yen since early May.
The Fed’s two-day meeting begins on Tuesday; officials are expected to debate a rate cut; Chairman Jerome Powell holds a press conference following the policy announcement. The Bank of England sets interest rates on June 20; no policy change is expected; Norges Bank and Bank of Japan decisions the same day, Governor Haruhiko Kuroda gives news conference European Central Bank officials meet in Sintra, Portugal on Monday; speakers include Draghi and BoE Governor Mark Carney.
Policy makers’ speeches also include Bank of Canada Deputy Governor Lawrence Schembri, Reserve Bank of Australia Governor Philip Lowe, Cleveland Fed President Loretta Mester and Fed Governor Lael Brainard Economic releases include euro area inflation, man. PMI; US leading indicators, PMI; UK inflation, retail sales; Sweden unemployment; see data calendar A second ballot in the UK leadership contest to chose Theresa May’s successor due June 18.
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