(Bloomberg) -- The Swiss franc touched the strongest level against the euro since the Swiss National Bank abandoned a currency cap almost nine years ago, as traders bet the European Central Bank will move faster to cut interest rates.

The franc climbed to 0.94087 per euro, the strongest since January 2015, before erasing the gains. It topped the peak set when the SNB roiled global financial markets with its unexpected move to end limits on how its currency traded against the common currency, which sent the franc soaring.

Now, however, the move reflects a shift in interest-rate expectations. Investor confidence is growing that the ECB will move to cut rates as soon as the first quarter of next year, earlier than its Swiss counterpart, even as officials at the central bank try to push back against cuts coming so soon.

“The Swiss franc tends to perform well when the euro zone is under pressure,” said Jane Foley, head of currency strategy at Rabobank, who sees potential for the euro-franc pair to fall to 0.93. “This week’s data has reminded us of the headwinds facing the Germany economy,” she said, following figures showing German factory orders unexpectedly fell in October.

A pivot by the ECB to reducing rates early next year would put it ahead of many developed-world central banks, including the SNB and the Federal Reserve. Economists at UBS Group AG expect the first cut in rates by the SNB in June.

Still, currency forecasts pooled by Bloomberg broadly see the Swiss franc weakening into next year, with average estimates for the euro-franc pair to hit 0.96 by the end of the first quarter. 

This has been reflected in options markets, with the majority of traders betting on downside for the currency against the euro. Since late November, two thirds of vanilla options have favored the euro over the franc, according to data from the Depository Trust & Clearing Corporation.

“The franc has enjoyed almost unending strength against the euro for many years,” said Steven Barrow, head of G-10 strategy at Standard Bank. “This could be challenged should a big risk rally develop, as the franc is usually regarded the safest asset and hence has the most to lose.”

--With assistance from Anchalee Worrachate and Vassilis Karamanis.

(Updates throughout.)

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