Swiss Franc, Japanese Yen Could Lag as Dollar Weakens

Dow Jones08-20

1356 GMT - The Swiss franc and Japanese yen could lag a broad rally against a weaker dollar as the U.S. Treasury's buyback announcement improves risk appetite, ING analyst Chris Turner says. The move suggests the Treasury is prepared to take action to support the bond market, he says. This also reduces volatility, supporting carry trades where investors borrow in low-yielding currencies like the franc and yen to purchase higher-yielding currencies. While the franc has rallied on positioning adjustments, it should "ultimately lag" even more than the yen due to the threat of further U.S.-Japanese currency interventions, he says. The dollar fell to a two-month low of 0.7947 francs and a 10-day low of 158.00 yen earlier, LSEG data show.

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