CHF (Swiss Franc)

CHF symbolizes the Confoederatio Helvetica Franc and is the abbreviation of the Swiss Franc. Confoederatio Helvetica is Latin for Swiss Confederation while the CHF is the official legal tender of Liechtenstein and Switzerland.

In Europe, the CHF is the only Franc still actively printed after the acceptance of the Euro became prevalent. Amongst forex traders, the Swiss Franc is nicknamed the swissie and is the seventh most frequently traded currency and accounts for an estimated 5% of all global foreign exchange transactions. 

Part of CHF’s popularity can be contributed to the fact that it is well-known as a “safe haven” currency, which has long been held by governments throughout the world as a safeguard against uncharacteristic volatility and uncertainty concerning investments and various financial markets. 

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The Swiss Franc is the seventh most frequently traded currency in the forex markets. – Image Courtesy of www.swissinfo.ch.

Similar to other major economies, inflation significantly affects the value of the CHF but given Switzerland’s historically neutral poise regarding foreign business affairs, the Swiss franc’s inflation has been minimum. 

Switzerland’s GDP and tourism have a significant influence on the CHF. On January 15th, 2015 the Swiss National Bank (SNB) removed its peg of 1.20 francs per euro that had been instated in September of 2011. The results were catastrophic for investors, firms, and brokers operating within the foreign exchange market. While the Swiss Franc skyrocketed 30% proportionate to the Euro within minutes, stocks tumbled and countless forex traders, brokers, and investment firms were obliterated. 

After receiving backlash, the SNB announced that they would be restoring their usual state of non-interventionism although later went on to declare they would be prepared to intervene once more should the occasion arise. Despite the consequences exhibited during SNB’s first intervention, the CHF is still considered by many forex traders to be a safe haven currency but should SNB interfere once more, ramifications far greater than those in 2015 may come into fruition. 

Forex traders who trade the CHF not only keep a close eye on SNB but also interest rate differentials to better gauge the welfare of the Swiss Franc against other major world economies.