US Dollar (USD) and Swiss Franc (CHF)
Known informally in the forex market as the “Swissy”, the US dollar (USD) / Swiss Franc (CHF) is one of the most traded pair of currency in the world. What makes this pair interesting is the comparison ratio of this pair. The US Dollar and the Swiss Franc are trading at near parity. Although the Swiss Franc (CHF) exchange rate to the US Dollar (USD) is 1.19 in 12 Mar 2009 @ Swiss Franc = 1 US Dollar, this exchange rate has came down to the current level of 1.05 Swiss Franc = 1 US Dollar.
Of course, trading at this level begs the question on whether the Swiss Franc will eventually be more expensive than the US Dollar, just like what happened to the Euro. This is a difficult question to forecast, at least in the immediate future. With the global financial crisis just abating, key indicators from both countries will determine the trading trend in the forex market. From Switzerland, the UBS consumption indicator will be the one to watch. From the United States, the Purchasing Manager’s Index, Industrial Price Index and the national employment rate will give some insights into where the dollar will be heading in the near term.
Some financial analyst believe that there are still some potential downside to the US Dollar, in line with the global recovery from the financial crisis that started in Oct 2008. As the risk appetite increases, more funds might be transferred out to recovery-sensitive currencies, unless another financial crisis of sorts emerges again.
Therefore, there is a good chance that the Swiss Franc may finally break below 1 US Dollar sometime this year.
