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The Swiss franc is one of five Major currencies. However, this isn't because of its trading volumes: USD/CHF accounts for just 4% of global foreign exchange volumes (less then than USD/GBP, USD/AUD or even the USD/CAD currency pairs).
Instead, the Swiss franc acts as a safe haven - a currency that investors turn to as a store of value rather than a source of capital appreciation at times of market turmoil. For example, the Swiss franc appreciated by 15% against the Dollar from 1.1964 on July 1st to 1.3779 on August 11th following the downgrade of the United States' credit rating by Standard & Poor's.
Switzerland's neutrality, stable political system and secretive banking system make Switzerland a popular destination for risk-averse investors. However, the currency's long standing ties to gold also explain its role as a store of value. Formerly, the Swiss National Bank (SNB) was required to redeem banknotes into gold on request. Until 1997, the Swiss constitution required that at least 40% of the currency be backed by gold reserves. Since, a constitutional amendment lowered the threshold to 25% and the bank's gold reserves have fallen. However, the Swiss franc maintains to this day a strong positive correlation with gold. When the price of gold rises, the Swiss franc is likely to appreciate in response.
The dollar is down roughly 1% in today's trading, as lower Treasury yields and a risk-off sentiment is dominant in the marketplace as British Prime Minister delivers her Brexit speech. USD/CHF, in turn, is also down approximately 1%, at the 1.0008 level. More »
Long entry after bullish price action on the H1 time frame following the next touch of 1.0049 or 0.9993. Place the stop loss 1 pip below the local swing low. Adjust the stop loss to break even once the trade is 20 pips in profit. Take off 50% of the ... More »
XAUUSD (1211.03): Gold prices closed above 1200.00 on a bullish note with today's open comfortably above this key resistance level. The next main resistance ...and more » More »
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