Carry traders pivot to Swiss franc as yen volatility spikes

Carry traders are increasingly turning to the Swiss franc in the near term for their source of funding as the threat of intervention and higher interest rates saps the appeal of borrowing in the yen. Hedge funds boosted their net short position in the franc to near a two-month high in the week through August 11, according to the latest data from the Commodity Futures Trading Commission. At the same time, they reduced their yen shorts for a second week. “The market has recently added short Swiss…