CHF - what kind of currency? Overview of the Swiss franc (Swiss franc, CHF)

The Swiss franc is conventionally designated abbreviation CHF. What kind of currency, we are talking about, try to figure it out. CHF (Swiss franc) is the officially recognized monetary unit of Switzerland, whose popularity is determined by the powerful banking system of the state. Frank is actively used in international banking calculations, belongs to the category of assets in international currency markets and is one of the leading monetary units in the world. The significance of the currency is growing noticeably during times of economic crisis. The minimum exchange rate fluctuations make the monetary unit an excellent alternative to the main world currency, the dollar.

General information

The Swiss franc, or CHF, which is a currency, is known to almost everyone, since it belongs to the category of freely convertible monetary units of the world. In international calculations, the share of the franc slightly exceeds 10%. The volume of gold and foreign exchange reserves in CHF corresponds to only 0.1%. The monetary unit is actively used for conducting deposit operations, and Switzerland itself is the owner of one of the highest credit ratings in the world. Control over the issue of currency is carried out by the state bank of the country. He is in the government, and one of his dominant tasks is to ensure a stable course. Considering the question of CHF - what kind of currency, we can say that the most common denominations have a denomination of 10, 20, 50, 100 and 1000 francs. In circulation, coins are distributed in 1, 2 and 5 francs, as well as 5, 10, 20 and 50 centimes. One franc corresponds to 100 centimes.

Characteristic features of the monetary unit

The national currency of Switzerland is characterized by low interest rates. The volatility of the currency rises in the case of important monetary and political events in Europe. In the last decade, you can observe a significant weakening of the currency. The price of the Swiss franc in the configuration of the course with the euro has a downward trend. If in the period to 2006 the average cost of the franc was € 1.5, then in 2011 you could observe a price of 1.1 euros. A significant impact on the reputation of the currency was inflicted in 2010, when it was decided to abandon the provision of a monetary unit with 40% gold reserves.

Frank in the foreign exchange market

The currency (Swiss francs) is actively used as a trading instrument in the international Forex market. It is perfectly suited for implementing a strategy characterized by minimal risks, known among traders as Carry Trade. The monetary unit is effective both for hedging risks and for their insurance. The maximum impact on the movement of quotations with the currency renders the policy of the state bank and important economic events in the territory of the EU. CHF / JPY, EUR / CHF and USD / CHF are the most common currency pairs in the foreign exchange market. They account for about 5% of all operations on Forex.

History of the Swiss currency

The Swiss franc was put into circulation in 1850. On the territory of the country at that time there was no such enterprise as a mint. The coinage was made by banks and private enterprises. Own funds were issued not only by financial institutions, but also by small towns and abbeys.

Beginning in 1920, the law came into force that the entire currency of the state would have security in the format of gold and foreign currency reserves (40%). During the period of the existence of the Swiss franc, CHF (which currency this is, we have already considered above), the devaluation took place only once, in 1936. The fall in rates was insignificant and did not exceed 30%. The prerequisite for the phenomenon was the economic crisis in the United States. Strengthening of the monetary unit fell for the period of World War II, as the state's money enterprises did not suffer from military operations. Banks played the role of depositories for the gold and currency reserves of the conflicting countries. Despite the pan-European crisis, at the moment the franc remains a bargaining chip in world currency.

The relationship between the franc and the US dollar

Trying to figure out which CHF currency and what influences its movement, it is worth taking into account its relationship with the US dollar. To analyze the situation, it is worth paying attention to the behavior of the American currency, and its movement in tandem with other currencies of the world. At times when a large investor wants to reduce risks, he directs the flow of capital to Switzerland, which automatically strengthens the exchange rate. Thus, the strengthening of the national monetary unit occurs separately from the development of the economy of the country itself. Switzerland is considered one of the richest countries in the world, and its currency is the most reliable. National banks of the category UBS and Credit Suisse have the title of the world's leading financial institutions. Despite the fact that the state of the country's economy is not advertised, every report of the National Bank and any changes in the aspect of the state's monetary and credit policy always attract the attention of almost all participants of the international currency market.

Features of the country's economy and its impact on currency popularity in the world foreign exchange market

It is very important to pay attention to the peculiarities of the Swiss economy by studying the topic concerning the Swiss monetary unit, also known as the CHF abbreviation. What kind of currency is this, we considered above, and now you can stay on the banking system. It is characterized by complete confidentiality, which allows you to effectively evade taxes. According to preliminary estimates by the world economists, it is possible to weaken the financial mechanism of the state only in one case - when imposing severe sanctions on the part of the EU on the state.

The reliability of the banking system of the state directly affects the reliability of its monetary unit. Features of the country's economy and the impact on the currency of the US economy and the EU economy determine the mirror movement of USD / CHF and EUR / USD. When one of them jumps, the second starts a similar movement, but with a slight time delay. The effectiveness of forecasting the movement of currency pairs is due to the stability of the franc on the one hand and the intensive movement of the dollar, on the other.