The U.S. dollar has been on the rise this week as of late, and the Swiss Franc has been following suit. The pair currently stands at 1.0432 and is expected to have long-term support at 0.9385, meaning that if the price moves back below, it will likely face resistance from 1.0927 and then 1.0365.
The European Central Bank (ECB) has been raising interest rates, but it is not stopping there. It is a known fact that the ECB first has to address inflation, and it continues to nurse its two-fold budget surplus along with purchasing government bonds on the open market in order to stabilize countries’ bond yields.
Interest rate hikes have been happening every month in recent months, and now the process will speed up even more. This week’s statement from the ECB will be quite significant, as it will show whether or not the bank is prepared to end its bond-buying program soon.
USD/CHF Weekly Chart
The USD/CHF pair has been on a tear the past two weeks, but on Thursday it lost most of its gains. With the Fed hike in December all but certain, there is a high probability that next week’s meeting will yield nothing new and that will allow the dollar to resume its upward trend.
A rate hike might help the dollar grow against other currencies, but it could also put pressure on the U.S. economy, which has seen stronger than expected numbers because of low rates for so many years now. Many experts think that keeping rates low for too long was actually harmful to the U.S. economy and that it also led to asset bubbles in some sectors.
Precisely because of these good figures, markets are expecting that a rate hike will soon be forthcoming. However, it is important to note that the Fed has made it clear that it will not hike rates if inflation remains below 2 percent, which is why another round of quantitative easing might also come into play once 2015 ends. At this point, however, this measure would only target long-term interest rates (the fed funds ceiling).
What is USD/CHF?
USD/CHF is a way of expressing how many U.S. dollars are needed to be exchanged for one Swiss Franc. The two currencies are tied together because the Swiss Franc is considered a safe-haven currency and investors turn to it when there is economic uncertainty. It is also pegged to the Euro, which means that when the Euro appreciates, so does the Swiss Franc and vice versa.
The USD/CHF is a fixed-rate foreign exchange currency conversion tool. It allows traders to easily view up-to-date exchange rates between the U.S. dollar and Swiss francs. The service tracks rates across many different exchanges and allows users to track those rates in real time. Users can also get live updates on these rates when they are analyzing trends and changes in prices of both currencies over a specific period of time with historical data so they have greater insight into what’s going on with these two currencies at any given time.
How is USD/CHF traded?
Trading the USD/CHF is one of the most popular foreign currency trading pairs. The table below shows a sample of how one type of trading order, a limit order, would work when buying or selling the USD/CHF. To best illustrate this, we will use an imaginary EUR/USD exchange rate that you would like to trade.
Let’s say you think the EUR/USD will increase in value by 1.5% over the next month. Luckily for you, this 30/360-day count convention applies to both currencies in this pair so it’s easy for you to find out how many euros it takes to buy one U.S. dollar.
