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What Moves Swiss Franc Currency Futures?


usdchf price study

Swiss Franc currency futures are widely traded in the currency future markets and Swiss Franc is one of the most stable currency in the world’s foreign exchange market

It is the national currency for the European countries of Switzerland and Liechtenstein.  The Swiss currency is regulated by the Swiss National Bank (SNB).

For decades, Switzerland has been an international banking and financial center  This currency is considered stable because it is strongly backed by the Swiss government’s gold reserves.  The Swiss economy is also a very strong economy and as a result the currency is not likely to suffer from frequent and sudden spike in value.

Swiss Franc is considered a safe haven currency by countries around the world.

Daily Swiss Franc Prices (CME)

Economic Indicators Affecting Swiss Franc Currency Futures

Switzerland’s Unemployment Rate

Recently one of the most important economic indicators that has influenced the Swiss Franc exchange rate has been the rising unemployment rate.   Major Swiss companies in the retail sector, travel and banking are worried that a strengthening Swiss Franc might lead to a rise in unemployment.

In addition, the Swiss National Bank expects Swiss GNP growth to fall slightly this year.  Clearly these would not help improve the employment rate. The growth of the Swiss economy has been affected and has exerted some downward pressure on the currency.

usdchf point and figure chart

Swiss Franc Currency Futures Strengthening Due To European Problems

Over the past few months, the Swiss currency appreciated in value against the Euro. This was the result of the financial meltdown in European countries like Greece,Spain and Ireland.  External trade with other European countries affects the strength of the Swiss Franc. Two thirds of all trade is conducted with Europe.

Investors panicked and there had been a stampede to convert their currencies to Swiss money. The appreciation of Swiss Franc does not help Swiss companies as it causes a fall of exports to other European countries. Conversely, a stronger European economy would lead to a fall in value of their Currency and Swiss companies would be able to increase exports to other European countries.

Government Intervention In Swiss Franc Currency

The recent rise in value of their currency affected the growth of the Swiss economy.  To protect their economy the Swiss government warned that they would buy up unlimited amount of foreign currencies in an attempt to protect their own currency.

This strong talk has convinced foreign exchange investors that they should not attempt to continue trading in a manner that would further drive up the value of the Swiss Franc or else the Swiss government could intervene.

Swiss Franc Is Stable

This currency will continue to be regarded as a very stable currency due to the fact that it is backed by the Swiss Government.  It is also the world’s best inflation-resistant money. It is well-know that Switzerland has a strong workforce, with the banking and insurance industry employing over fifty per cent of the population.

Hence the Swiss Franc currency futures will continue to be regarded as one of the safest bet by investors in times of uncertainty.

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