The Euro is not just another safe haven for investors who want to invest in international stocks and bonds. Unlike the U.S. dollars, it is widely recognized and accepted as a reliable store of value. The Swiss franc (CHF) also ranks fifth in global terms for global liquidity. One out of every ten dollars is traded in the EUR/CHF pair each day. This gives the Swiss franc the sixth-most high liquidity trade volume among all the major currency pairs.
The Swiss government has been floating the idea of introducing the Swiss franc as a major global currency since 1994. This move was meant to counter the dominance of the U.S. Dollar against other currencies. Since its introduction the CHF has lost slightly against the EUR and GBP, but this is still a significant gain when compared to the losses incurred during the last two trading cycles. The Swiss government sees the CHF as a safe haven for investors worldwide who prefer to trade in currencies other than the EUR/USD, primarily due to the low level of government intervention and its strong trading volume in international markets.
The main reason why the CHF is seen as a safe haven by many investors is its relatively low exchange rate against most major currencies. This makes it a particularly attractive trading option for those interested in making short positions in the euro. For these investors the EUR/CHF has always had the upper hand. In the past, the gap between the Swiss Franc and the euro was considerably greater, but after the introduction of the Euro the gap has been steadily closing down. This has resulted in increased demand for the Swiss Franc as an international investment currency.
Investors who are trading in the EUR/CHF include institutional players, corporate entities, insurance companies, European banks and multinational companies. The euro area remains one of the most stable economic releases from Europe and there is no sign of it losing its popularity. It is currently the third largest currency in the world behind the USD and the GBP. While the CHF continues to be a strong competitor in the international financial market, it is not a direct competitor of the USD and the euro. Despite this, many forex investors favour the Swiss Franc over other currencies mainly due to the stability of the exchange rate and its ability to withstand periods of economic volatility.
Traders will always look for currency pairs traders can profit from when seeking out additional risks or opportunities to make money. The CHF has very low leveraged profiles which make it ideal for these investors. The low levels of leverage to make it a very attractive trading opportunity for investors who want to increase their exposure without taking on higher risk themselves. If you are thinking about entering the forex market, then you should give the CHF a serious look.
If you are trading futures in the EUR/CHF pair, then you will be dealing with two different markets. These are the European Exchange and the European commodity markets. Most traders will prefer to trade the EUR/CHF due to its relative strength. It is currently the eighth most traded currency by forex traders according to data from the Yahoo Finance hub. There are several reasons that traders prefer to trade this pair compared to other currencies such as the USD or the GBP. One reason is that the CHF is a lower cost currency, which means it will take less of your money to trade, and so you will end up making more profits if you buy and sell it at the right time.
Traders also like trading the euro because they have the potential to gain a lot of money very quickly. However, the CHF is not perfect either. Because it follows a European trading day, the market will open and close at the same time. This means that you will experience two different opening times. For some people this is an advantage, however if you are a person who hates fluctuations, then this can be disadvantageous to you. You may find yourself over-trading during the busy part of the day, and under trading when the market closes for the day.
The last currency pairs I will discuss are the Swiss Franc (SFL) and the Japanese Yen (JPY). The Swiss Franc has a stable value in relation to other currencies and is relatively easy to trade. On the other hand, the Japanese Yen is quite strong and is highly unlikely to lose its value. The nice thing about trading the Swiss Franc (SFL) is that you can trade it for just about any other currency in the world. Therefore, if you like trading currencies, the Swiss Franc should be a strong consideration.