The Swiss franc gained ground in early trading on Monday, as dealers were unwinding risky carry trades in choppy financial markets, easing pressure on the franc, market participants said. European shares looked set to open lower again after plummeting on Friday, as fears that a crisis in credit markets could spread to other sectors spooked traders.
"Markets are extremely nervous ... and when they are nervous, all risky deals are being cancelled, including carry trades," one analyst said. The franc was roughly 0.1 percent stronger against the euro at 1.6376 per euro, while climbing some 0.6 percent against the dollar at 1.1828 per dollar.
Carry traders have in the past benefited from low interest rates in Switzerland, borrowing francs to invest in higher-yielding currencies, sending the Swissie down to multi-year lows against the euro.
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