USD/CHF: The U.S Dollar and The Swiss Franc
The USD/CHF currency pair (with the USD as the base currency and the CHF as the quote currency) is the official currency of Switzerland. Nicknamed the ‘Cheffie’, as of April, 2013, the Swiss Franc accounted for more than 5.2% of the daily foreign exchange turnover ranking 6th behind the AUD. The Swiss Bank, Switzerland UBS AG, accounts for 10.9% of the Daily Forex Volume. The Swiss Franc is also considered a ‘reserve’ currency.
Nicknamed the Swissie, the Swiss Franc accounts for more than two percent of the daily turnover of the entire Foreign Exchange Market. Since 1998 when the NZD was ranked 17th, it has climbed steadily to reach the recent rank of 10th on the Forex’s daily turnover following behind the Chinese Yuan.
History of the Swiss Franc
The Swiss Franc, controlled and administered by the Swiss National Bank, was originally established on May 7th, 1850. In the 1920’s, the Swissie was backed by a 40% gold reserve, a legal requirement, which was ended in the year 2000. Switzerland still has over 20% gold reserves relative to the Franc monetary supply. Once considered a safe haven currency, the Swiss Franc no longer holds this distinction.
The Swiss Economy
Switzerland has a Gross Domestic Product of approximately $363 Billion and ranks as the 4th largest trading partner in the European Union. The major sectors comprising the GDP are services, industry and agriculture. Its main industries and major exports are banking, tourism, chemicals, watches, textiles and machinery.
Factors Affecting the USD/CHF currency pair
Obviously, fluctuating commodity prices has an effect. Although Switzerland remains politically and economically neutral, any political unrest or change in the Eurozone has an impact. This pair has major movement during the Australian / Asian open and the European trading session.
Main export partners
United States 11.6%
United Kingdom 5.3%
Main import partners
United States 5.12%
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