Forex Flash: Asset managers sell CHF – UBS

FXstreet.com (Barcelona) - Despite the price action, it appears that some key client categories holding long-franc positions are unconvinced of the move. According to Analysts Gareth Berry and Geoffrey Yu at UBS, "Our flow data showed that the biggest sellers of the franc were asset managers buying the EURCHF and hedge funds buying the USDCHF, but otherwise corporates and private clients were not on board at all."

On the contrary, corporates engaged in their strongest week in selling the EURCHF since early September, while their USDCHF selling, though moderate, extended the an existing sales streak to the seventh week. Private clients also registered their strongest week of the USDCHF selling since mid-May 2012 and their EURCHF sales were the heaviest since July 2012.

Moreover, "We note that corporates and private clients accumulated the bulk of their long-CHF positions after the SNB floor in the EURCHF was put in place in Q3 2011, suggesting they were taking advantage of a perceived temporary guarantee in the exchange rate to move into the franc. Last week's flow patterns clearly show that their skepticism has not changed and are merely taking advantage of the decline in CHF to add to current positioning." they add.