USD/CHF - US Dollar / Swiss Franc - Forex Currency Pair
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The USD/CHF Currency Pair (U.S. Dollar / Swiss Franc) is the exchange rate of U.S. Dollar Swiss Franc. It expresses the value of one US dollar in Swiss Francs.
The USD/CHF is the 5th most traded pair and represents 4% of the total of transactions on the FOREX in 2010. From 2008 to 2010, the volatility of the Dollar USD / Swiss Franc has been about 130 pips.
The USD/CHF is known as a pair in trend. Indeed, there is often a long upward or downward trends. It is therefore a pair adapted to Swing Trading. However, scalpers will enjoy much less because of the lack of volatility.
The CHF is also considered a safe haven as well as gold. In case of economic crisis, the Swiss Franc appreciates. We note also that the EUR/CHF and USD/CHF exchange rates are highly positively correlated.
Since its creation, the USD/CHF ranged from 0.9636 Swiss francs, the lowest reached in March 2008 and 1.83 CHF in October 2000.
The pair USD/CHF is quoted in 4 decimal places but you can sometimes find 5 with some brokers. The exchange rate is floating and therefore subject to the law of supply and demand on the interbank forex market.
Both central banks linked to the pair Euro / Swiss Franc are the Federal Reserve (FED) for the USD and the Swiss Central Bank (SNB) for CHF. Not like other central banks, the SNB regularly intervenes directly on the foreign exchange market to control its currency. Thus, it is not common to see significant upward and downward spikes on parity reflecting an intervention by the SNB.
The decisions taken by both central banks also have a strong impact on the evolution of the pair EUR / CHF (interest rate changes, asset buyback program ....)
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US DOLLAR (USD):
The U.S. Dollar (USD) is the currency of the United States. The U.S. dollar is the most traded currency on the Forex and is present in 85% of total transactions in 2010. In 2001, 90% of transactions were linked to the Dollar. The U.S. dollar is a currency of reference both in the foreign exchange market and in international trade.
The dollar is still considered a safe haven even if the contestations are becoming more numerous. Indeed, the debt of the United States but is becoming alarming, but does not challenge the supremacy of the dollar.
The dollar is also the most used currency in reserve in the world especially in China which has 2.5 trillion dollars in foreign currency reserves.
In terms of banknotes in circulation, the dollar is the second currency in the world. You can see below a $1 banknote :
The U.S. dollar is controlled by the Federal Reserve (FED) that is responsible for making monetary policy decisions.
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SWISS FRANC (CHF):
The Swiss Franc (CHF) is the national currency of Switzerland. The Swiss Franc is the 6th most traded currency on Forex. The CHF is present in 6.40% of total transactions on the Forex in 2010.
The Swiss franc is considered as the best safe haven. Indeed, in times of crisis, there are often massive purchases of Swiss Francs to be cover of the risk. Switzerland is considered as a stable country with large reserves of gold and besides the policy led by the Swiss National Bank (SNB) is very conservative. Indeed, the SNB seeks to control the value of its currency and you can find many direct interventions of the SNB on the foreign exchange market.
Furthermore, Switzerland has maintained its reputation as the country of confidentiality and that continues to attract investors.
You can see below a 10 Swiss Franc banknote:
The CHF is controlled by the Swiss National Bank(SNB) that is responsible for making monetary policy decisions.
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