Could the Swiss Franc Be the Next Big Short?

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If you missed selling the yen before its big swoon, cheer up. There could be another great currency-selling opportunity on the horizon.

The Swiss franc was stuck at 1.20 euros for nearly all of 2012, thanks to a peg set by the Swiss National Bank in the fall of 2011 when the euro zone was deep in crisis mode. By effectively setting a floor below where the euro could fall against the Swissie, the move mollified Swiss exporters who were struggling to contend with local currency strength.

But the euro has been rocketing higher against any number of currencies, and the Swiss franc is no exception. And with so much bullish sentiment around the euro, investors are starting to wonder whether it still makes sense to stick with the safe-haven Swissie.

Their trading decisions will likely hinge in large part on what European Central Bank President Mario Draghi has to say at an upcoming governing council meeting. "If Draghi does not voice any concern about the euro, the euro goes higher, and euro-Swiss will likely go higher," saysRebecca Patterson, chief investment officer at Bessemer Trust. She told CNBC's Melissa Lee that "if you do get concern out of Draghi or the leaders at the summit later in the week and you get some weakness in the euro, that's probably an opportunity to buy euro-Swiss."

Patterson points to improving sentiment in Europe and strengthening bond and stock markets there as reasons to sell the Swiss franc. Then there is the matter of foreign investors with Swiss bank accounts. "People who had money in Greece and Spain and Portugal will probably want to take it back from accounts in Switzerland," she says. With Swiss interest rates negative, investors are effectively paying to keep their money in the country, and "why would I want to do that if I can make more money at home?"

Switzerland does have a big current account surplus, Patterson says, reducing its need for capital flows. That will slow the pace of any currency selloff. Still, she says, the Swiss franc is not the next yen, but I think it's probably the next best thing right now."

Patterson wants to wait for a pullback in the euro and then buy it against the Swiss franc at 1.2300. She is looking for a move to 1.2500 and she recommends a stop at 1.2240.

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