Trading with the USD and CHF Foreign Exchange Rate

USD/CHF Foreign Exchange Rate

This article looks at trading with the US dollar and Swiss franc foreign exchange rate.

There are a lot of traders who look at using the US dollar and Swiss franc foreign exchange rate to trade.  There is a lot of information that you should know about this foreign exchange rate before you decide to trade with it.  You should know a bit about the currencies that make up this foreign exchange rate and the way that you can trade with the currency pair.  When you know all of this you will be able to better trade with the currency pair and determine what you should be looking for with analysis.

The US Dollar

The US dollar is the most commonly traded currency on the forex market.  Of all the trades that are complete on the forex market each day around 80% of them will have this currency in them.  This is due to the US dollar having the world’s largest economy backing it up and the fact that the currency is the world’s reserve currency.  There are a number of other factors that make this currency so popular with traders.

The Swiss Franc

The Swiss Franc is commonly known as the banker’s currency because Switzerland is seen as the banking hub of the world.  The Swiss franc is also popular with many people because of the neutrality of the country and the reputation for discrete banking.  When there is a lot of volatility on the market many traders will turn to the Swiss franc for a more stable currency to trade with.

Trading With the US Dollar and Swiss Franc Foreign Exchange Rate

The Swiss franc is not as liquid as the other European currencies of the British pound and the Euro.  This does not mean that you cannot easily trade with this currency.  This currency is considered easy to trade because it is stable and you can find information about the movements.

One of the factors that are most likely to affect the movement of the Swiss franc is economic and political international instability.  When this occurs investors will increase their holdings in Switzerland which increases the value of the Swiss franc.  Of course, when stability returns the value of the currency will lower because of the removing of the assets from the country.

When you look at trading the US dollar and Swiss franc currency pair you will find it a bit harder to predict.  The movements of other Swiss franc currency pairs have certain movements based on the international factors.  However, the problem with this currency pair is that the US dollar is also seen as a currency to turn to when there is instability.  This makes it harder to determine which currency is going to strengthen in the currency pair.

To do this you will need to assess the instability that causes a movement and determine which currency is more likely to strengthen.  When you are looking to trade in times without instability you should look at the movement of the Euro.  The Swiss franc is closely linked to the Euro and changes in one currency will affect the other.  This will also affect the way the currency interacts with the US dollar.

 

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