Switzerland is a beautiful country. Tourists from all over the world tend to visit Switzerland in large numbers. Swiss Franc (CHF) also known as Swissie is a popular currency in times of financial crisis. Swissie tends to hold its value when others don’t and is known as a reliable currency. This has something to do with the reputation Switzerland has developed over many decades as a safe haven or a tax free haven. CHFUSD is a popular currency pair that many forex traders trade. Sometimes back, the FAP Turbo team had launched a limited copies of the FAP Turbo Swissie that sold out like hot cakes. This forex robot was solely developed to trade this popular CHFUSD currency pair. Trading CHFUSD can be highly profitable and lucrative if you have a sound trading system like the FAP Turbo Swissie. Get these Forex Scalping Cheatsheets FREE. Discover Forex MegaDroid Robot that made 2,270.30% in 2009 averaging around 101% every month. Get the Ultimate Swing Trading Software FREE.
Switzerland is known to have reliable economic fundamentals and tends to take strong aversion to high inflation. Swiss Banks are famous all over the world and considered to be safe haven for all sort of deposits. The rich and the famous and the bold and the beautiful tend to stash their wealth in the Swiss Banks. Plus the policy of no questions asked make Swiss Banks open for all sorts of people. Switzerland is a long history of current account surpluses. So Swiss economy is considered to be stable and sound even in times of global financial crisis like that happened in 2008!
Switzerland has the 4th largest reserves of gold in the world and still pegs CHF to gold. CHF money supply is tightly controlled so as not to exceed these gold reserves. Rather the gold reserves exceed the CHF money supply. This gives a strong foundation to CHF in times of financial crisis. Switzerland has a long history of neutrality in times of political crisis and tension. This policy of political neutraliy gives the Swiss Central Bank (SCB) independence in making its monetary policy. This is in sharp contrast to the European Central Bank that is beholden to the whims and wishes of its memeber countries. Each one of them trying to push its economic agenda. SCB is very strict againt fighting inflation and has a policy target of 2% inflation in the economy. This makes CHF a very stable currency.
With a tight monetary policy, investors expect CHF to be a stable currency that can hold its value over the period of time. Now trading the CHFUSD pair can be highly lucrative. Both EURUSD and USDCHF pairs move in opposite direction. So you can trade both these pair simultaneously to hedge your risk.
Curreny markets are highly susceptible to breaking news. When there is a breaking news that relates to some unexpected economic release, it can make the currency market highly volatile. EURUSD pair moves a lot with breaking news of fundamental nature. Now, you need to know this fact that sudden move of EURUSD pair is always followed immediatley by an equally sharp move in the opposite direction by the CHFUSD pair.
Now CHF can be affected by the following data that you need to keep an eye while trading the CHFUSD pair. The most important is the release of CHF M3 ( this the broadest measure of money supply in an economy). The second is the release of Swiss CPI. Now as said before, SCB has a target of 2% inflation but these targets are not set in stone. Sometimes, the central banks let inflation soar in order to spur economic activity. You also need to keep an eye on the unemployment data in both US and Switzerland.
