The currency pair US Dollar – Swiss Frank (USD / CHF)

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The currency pair US Dollar - Swiss Frank (USD / CHF) is considered not to be one of the most popular assets. Still, many traders likes it, because he called the most predictable at the market. It is connected with the tranquility of the asset. There are very few events that could significantly shift Swiss Frank towards uncertainty. Let`s took a closer look at this currency pair.

Currency pair USD /CHF comprises an American and Swiss currency that’s why the asset main activity occurs for day time. The most volume of operations occurs within с 08:00 to 20:00 Moscow time. It’s the time when European and American exchanges are open.

It is worthy of note that volumes increase implies sharp changes not always in quotations USD / CHF.  These quotes are active around the clock in actual fact. The asset volatility goes down for nighttime hours in any case. At that pair USD / CHF tends not to run into prolonged flats without bright tendency and price move in pair even to either side. Speaking of average volatility it slightly varies with day of week and comprises around 100 points per day. That’s why traders form Forex make active use the asset – because there is motion hence there is opportunity for income.

The most impact on USD / CHF rate is ensured by events inside Switzerland. The surprising thing this is one of some currencies that are subject to influence of external factors a little. Nevertheless this is the influence and from economy of the USA first and foremost. But it may be said about all pairs actually.

 

Why is this currency so popular among traders and investors? The reply lies in Swiss bank system that provides very low interest for loans. As a result many international operations begin to perform to in this currency. As consequence a demand for it grows sharply on international exchanges.

Correlation with other assets

It should be recorded the inverse correlation with pair USD /CHF if to make

comparison and correlations as to pair USD/CHF .  However this correlation may be disappeared subject to terms and conditions of market. There is a very simple strategy and it is necessary to wait for a motion to EUR/USD and then open trades in opposite direction already to CHF.

It is noted there is some delay (not always but often) in spite of close relations between these assets .  At that the delay in response is just for pair USD/CHF.

Important limitation is during news issue in Switzerland and ( or) USA   and correlation may be broken . It is necessary to wait until a market normalization and not to touch the pairs . It’s very simply to test it as soon as the assets began to move to opposite sides synchronously again so the correlation is rebuilt.

Many similarities have the asset with pair CHF/ USD. In actual fact it is a mirror зеркальный backup which has a full inverse correlation with main asset. Traders do not operate often with this asset in binary options trading, but it should be known about feature of the pair CHF/USD or merely pair Franc /Dollar. Do not forget that not all brokers possess by such pair.

Recommended practice

You should remember about simple rules and trends that permit to make the trading more profitable when realizing trades with Dollar-Franc (the pair is quite predictable):

  • Any negative news concerning dollar (including a politic news) leads to franc growth , because investors are fast to transfer their funds into more secure currency. That is a popularity of pair USD/CHF.
  • The prices on gold have a great impact to Franc /Dollar. Investors point out that the prices on gold increase leads to  Franc rise in price. It is connected with one simple concept– Swiss currency is secured with gold partially up to now.
  • We have already noted rates of interest in Switzerland are important for this asset. As soon as a state increase rates of interest the CHF loses positions.
  • Any important economic news from both countries have a severe effect on the asset –currency pair USD/CHF and hence it’s necessary to deal with them.

It is required to note at the end of the article that unique character of pair USD/CHF in that this asset has a high liquidity. This property is marked by many traders – the asset may be sold and bought in any second actually. That’s why many traders operate using this pair.

Additional data on the subject:

-  currency pair EUR / USD

-  currency trading

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