EUR/CHF - Euro / Swiss Franc - Forex Currency Pair


eurochf

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The EUR/CHF Currency Pair (Euro / Swiss Franc) is the exchange rate of the Euro in Swiss Franc. It expresses the value of one euro in Swiss Francs.

The EUR/CHF is the 9th most traded pair (behind the EUR / JPY and EUR / GBP) and represents 2% of total transactions on the FOREX in 2010. From 2008 to 2010, the volatility of the Euro / Swiss Franc was about 90 pips.

The EUR/CHF is known as a pair in trend. Indeed, there is often a long upward or downward trends. It is therefore a pair adapted to Swing Trading. However, scalpers will enjoy much less because of the lack of volatility.

The CHF is also considered a safe haven as well as gold. In case of economic crisis, the Swiss Franc appreciates. We note also that the EUR/CHF and USD / CHF exchange rates are highly positively correlated.

The Euro has a less prominent role on the evolution of the pair. However, economic announcements in the Eurozone will have a direct impact on the pair EUR/AUD.

The pair EUR/CHF is quoted in 4 decimal places but you can sometimes find 5 with some brokers. The exchange rate is floating and therefore subject to the law of supply and demand on the interbank forex market.

Both central banks linked to the pair Euro / Swiss Franc are the European Central Bank (ECB) for the EUR and the Swiss Central Bank (SNB) for CHF. Not like other central banks, the SNB regularly intervenes directly on the foreign exchange market to control its currency. Thus, it is not common to see significant upward and downward spikes on parity reflecting an intervention by the SNB.

The decisions taken by both central banks also have a strong impact on the evolution of the pair EUR/CHF (interest rate changes, asset buyback program ....)

EURO (EUR):

The Euro is the currencies of the countries member of the European Union which have adopted the Euro. The Euro was introduced on January 1st 2002 in 11 countries and gradually other countries have also adopted the Euro as shown in the map below:

EUROS

The euro is the second most traded currency on the Forex. It is present in 39.10% of transactions in 2010. Its overall share in the number of transactions increases gradually each year but still far from the dollar and its hegemony. In 2004, the euro was present in 37.40% of transactions on Forex. The Euro is a currency of reference both in the foreign exchange market and in international trade. The euro is also the first currency in terms of banknotes in circulation.

The Euro is however considered as a currency risked. Investors buy the euro if they think the global economy is healthy. However, in times of crisis, the dollar appreciates against the euro. Indeed, the dollar is considered a safe haven.

The Euro (EUR) is controlled by the European Central Bank (ECB) which is responsible for making monetary policy decisions.

SWISS FRANC (CHF):

The Swiss Franc (CHF) is the national currency of Switzerland. The Swiss Franc is the 6th most traded currency on Forex. The CHF is present in 6.40% of total transactions on the Forex in 2010.

The Swiss franc is considered as the best safe haven. Indeed, in times of crisis, there are often massive purchases of Swiss Francs to be cover of the risk. Switzerland is considered as a stable country with large reserves of gold and besides the policy led by the Swiss National Bank (SNB) is very conservative. Indeed, the SNB seeks to control the value of its currency and you can find many direct interventions of the SNB on the foreign exchange market.

Furthermore, Switzerland has maintained its reputation as the country of confidentiality and that continues to attract investors.

        You can see below a 10 Swiss Franc banknote:

Swiss Franc

The CHF is controlled by the Swiss National Bank(SNB) that is responsible for making monetary policy decisions.

 

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