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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.
At the time of writing, the pair was trading at 1.0115 with the USD trading 0.35 percent lower against the CHF from the previous session. The pair is expected to find resistance its first resistance at 1.01000 and a breakthrough could take it to the ... More »
USD/CHF had posted strong gains in Wednesday's session as the dollar rallied ahead of President-elect Donald Trump's 11:00 ET press conference. However, the event proved a disappointment to dollar bulls as Trump made no mention of fiscal stimulus.and more » More »
USD/CHF is lower in today's trading, currently holding near 1.0075, down 0.34% from Thursday's North American close. The pair is feeling pressure from the dollar, which is down 0.25% ahead of today's US data. December retail sales and PPI are both due ...and more » More »
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