Course history
The predecessor of the Swiss franc was the Helvetic franc, which functioned from 1789 to 1803, as well as the old Swiss franc from 1819. The Swiss currency had its real beginnings around 1850 and for a long time was closely linked to the French franc, with which it formed the Latin Monetary Union. Everything changed thanks to the Franco-Prussian War, which made the Swiss realize that dependence on another currency could be dangerous. Long-lasting changes resulted in the creation of the Swiss franc after the creation of the Swiss National Bank in 1907.
One Swiss franc is divided into 100 centimes (in French-speaking cantons) or into 100 rappen (in the German-speaking region). Both names function officially. Monetary policy decisions in Switzerland are made by the Swiss National Bank. More information can be found on Webinar Universe.
Top currency pairs
The training platforms available on Webinar Universe provide m.in information on the most important currency pairs. Among those containing the Swiss franc, CHF/USD (Swiss franc + US dollar) can be mentioned. It is also worth mentioning the cross currency pairs, which are a combination of two major currencies but without the US dollar. These are m.in. CHF/EUR (Swiss franc and euro), CHF/GBP (Swiss franc + British pound). The CHF/PLN pair is also interesting due to the fact that many Poles have taken out mortgages in the Swiss franc and must actively monitor its exchange rate.
It is worth mentioning the concept of a safe haven at this point. Such currencies have their raison d'être because, although the forex market is liquid, it is also characterized by volatility and violence. Couples that were once strong may lose value after economic changes. However, there are some pairs with a tendency to be stable or rising during times of economic uncertainty. The Swiss franc is one of the currencies that traders turn to in times of financial instability. It has risen many times against other safe-haven currencies. Popular safe haven pairs are US Dollar/British Pound (USD/GBP), US Dollar/Euro (USD/EUR), Japanese Yen/British Pound (JPY/GBP), Swiss Franc/Euro (CHF/EUR). Beginner traders can use an online platform like Webinar Universe.
Course Factors
The exchange rate of the Swiss franc directly depends on the relationship between demand and supply. The most important factors directly affecting this aspect are: inflation, interest rates, the country's trade balance and the geopolitical situation in the world.
The level of interest rates set by the SBN affects the profitability of treasury bonds, and higher rates increase their yields, which encourages investors to invest their capital in Switzerland and, as a result, increase the stay on the Swiss franc and increase its price. Economic growth improves Switzerland's trade balance, which also affects the franc exchange rate. It is also related to economic forecasts. The current overvaluation of the Swiss franc poses a significant threat to the Swiss economy, which is why the central bank is striving for a permanent weakening of the Swiss franc and has announced measures to maintain the minimum exchange rate of 1.20 on the foreign exchange market.
Future predictions
Expert forecasts regarding the exchange rate are often very accurate, but it is important to remember that the forex market can be unpredictable. The franc exchange rate is influenced not only by the political and economic situation in Switzerland, but also around the world. Compared to the end of 2023, the average franc exchange rate has fallen, but it still remains high.
According to forecasts, the level is expected to be relatively stable until the end of 2024. Even small decreases will be positive news for people who have taken loans in Swiss francs. However, there is no reason to count on a significant drop in the price for a long time. It is worth emphasizing once again not to take forecasts for granted, as the situation may change dynamically contrary to previous predictions.
The Swiss franc is a well-known currency, despite the fact that it is the official currency of only two countries. People investing in the forex market pay attention to its high stability, due to which it is called a safe haven. However, you should always remember that the market changes dynamically and you need to make thoughtful decisions, not impulsive ones, and gain basic knowledge before you start investing. Of course, more experienced people also need to be educated.