Updated : May 29, 2021 in Uncategorized

3 Advantages of Trading the Swiss Franc against the US Dollar

The Swiss franc is also known as the Euro, EUR, and DELL. It is a currency that is recognized by over 50 countries. In terms of purchasing power, the CHF is the strongest currency in Europe. The CHF is also the official currency and legal tender in Switzerland and Liechtenstein. Given the different languages used in Switzerland, Latin for foreign language-neutral inscription on its currency, the CHF maintains the highest level of strength in relation to other currencies in Europe.


The CHF is traded in US dollars at the current exchange rate of $0.715 against the CHF. Some other common currency codes include GBP, EUR, and GBP/CHF. These are currency trade pairs that are used in global trade. While the CHF has the highest per capita trading volume in comparison to other currencies in the world, many US citizens also use the Swiss franc as their global currency of choice. Moreover, many countries like Canada, Mexico, and Italy have also become major users of the CHF.

In order to clarify the differences between the CHF and the US dollar, let us first look into the background of the CHF. The CHF was first introduced in 1965 when international free trade was being negotiated at the Bretton Woods agreement. The CHF is derived from the German mark that was used as a standard unit of measurement for monetary exchange during that time. Since there was no standardized international money, the CHF was adopted to be used as an internationally recognized unit of measurement for monetary transactions among member countries of the Bretton Woods agreement. The CHF has remained the most stable foreign currency since its inception and it continues to be the second most traded currency in the world.

Getting Bank beating with the Swiss Franc is easy when you know how. Many people believe that they can use the CHF as a means of transacting without giving much thinking to the currencies of the United States and other western countries. However, this is not exactly true. There are several reasons why trading the Swiss Franc is a good idea and one of which is to gain more advantages when trading the Swiss Franc against the US dollar.

First and foremost, the CHF is a freely transferable currency and can be easily traded in any country. This includes the United States. Many people compare the CHF to the Euro or the Japanese Yen and say that they are easy to trade, however, these comparisons are a little bit farfetched. The CHF is relatively stronger by every measurement compared to the euro or the Japanese yen and even the United States dollar. In fact, most experts agree that the Swiss Franc is stronger than the US dollar or the Euro at present.

Another advantage of exchanging the CHF with the US dollar is that the CHF is highly liquid. This means that it can be easily bought and sold depending on the current exchange rate. Since many banks in Switzerland are also international banks, the CHF is available for trade in almost all international currency pairs. This makes it possible to hedge your currency risk if you are planning to enter into transactions involving Swiss Francs.

A third advantage of trading the Swiss Franc against the US dollar is that it allows you to exploit the Swiss currency trend to your financial advantage. If the exchange rate between the CHF and the US dollar rises, then you will profit because the CHF is cheaper than the US dollar. For example, if the Swiss Franc is trading at three Swiss Herures per US Dollar, then it would be worthwhile to buy and sell dollars to increase the value of your Swiss Francs. Alternatively, if the Swiss Franc trades at forty Swiss Herures per US Dollar, then it would be less profitable to buy Euros to increase the value of your Swiss Francs. The Swiss National Bank (SNB) does not allow its official reserves to be used as a foreign currency to settle the balance of their foreign currency liabilities.

If the CHF is fluctuating significantly, it might be advantageous to trade the Swiss Franc against another major currency to exploit the upward trends of the CHF. In recent years, the Swiss National Bank has issued interventions to stop the Swiss Franc appreciation, most notably in the mid 2000’s when the value of the CHF was increasing against the Euro and the US Dollar. However, if the international market sees an unfavorable shift in the exchange rate between the Swiss Franc and the US Dollar, it might be worthwhile to hold the Swiss Franc for a while to minimize the losses. The Swiss National Bank also allows foreign banks to trade the CHF against US Dollars, effectively creating a Forex market in Switzerland.