New Forex Trends

Forex Markets: Swiss National Bank and the CHF

Forex Markets: Swiss National Bank and the CHF

The foreign exchange market is governed by a large number of factors, as it is truly a global environment.  In addition to this, the state of one national economy can actually influence the currency values of another depending on the situation that is developing.  

Anytime we are looking to make an assessment of where forex markets are headed at any given time, it is important to have an understanding of the monetary policy stance at the most relevant central banks.  In Switzerland, this generally means watching for developments at the Swiss National Bank (SNB), which can have tight controls in place over the value of the national currency.

In the forex markets, the Swiss Franc is abbreviated as CHF and is often traded against the US Dollar (USD), Euro (EUR), and the British Pound.  There are many other currencies that can be used to buy or sell the CHF in the initiation of new forex trends but the broad majority of the trading volumes in the CHF is seen in the context of these major currency choices.

To complete the actual forex trades, there are many different types of trading methods that can be used.  One approach that offers excellent opportunities is the Contract For Difference, or CFD.  In this forex trading strategy, investors are able to speculate on the future value of an asset and then capture the difference as profit when the overall valuation direction of the asset of accurately forecast.

Trading with CFDs

To complete the actual forex trades, there are many different types of trading methods that can be used.  One approach that offers excellent opportunities is the Contract For Difference, or CFD.  In this forex trading strategy, investors are able to speculate on the future value of an asset and then capture the difference as profit when the overall valuation direction of the asset of accurately forecast.

In the foreign exchange markets, investments that utilize CFD trading strategies can take assets like the CHF and pair it with the other forex majors to construct a market position.  So, as an example, if you believe the value of the US Dollar will fall relative to that of the Swiss Franc you can enter into a bearish position using the USD/CHF currency pair.  

When dealing with forex pairs, the first currency in the pair is known as the base currency.  The second currency in the pair is known as the counter currency.  Traders can sell the currency pair if there is a strong belief that the counter currency will rise in value.  In contrast, traders can buy a currency pair if there is a forecast that the base currency will be the stronger of the two.  All of these strategies can be implemented by Swiss traders in using CFD strategies, as there is a strong history of success for a large portion of the market in receiving profitable gains for the effort.

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