Most traders in the market often depend on gold and foreign currencies to trade.
However, the United States Dollars (USD) is the primary currency when it comes to trading in the forex market.
Traders that are looking for a stronger alternative to the USD, to save and earn money, should consider the Swiss Franc, which is the currency of Switzerland.
The Swiss franc (CHF) is regarded as one of the strongest currencies in the world; not only that, it is also a safe haven for investors and the world of finance.
The reason why the Swiss Franc is a stable currency and a haven for the world of finance is that it is known to keep its value no matter the state of the market.
When you invest in the Swiss Franc, you are ensured with high security and protection from inflation and market turbulence.
Why Investing in Swiss Francs
There are many benefits to why you should invest in the Swiss Franc; one of them is due to the stable economic system of Switzerland and its steady economic growth.
Switzerland is stable with no economic deficit to it. Moreover, the income in Switzerland exceeds that of the expenses; hence, the economy is reliable with steady growth. Switzerland also has a low unemployment rate with a high per capita income.
When European debt was increasing, back in 2011, the Swiss Franc was still stable and wasn’t affect by the turmoil.
However, lots of investors, including the world of finance, began to rely on CHF, and that drove its value to increase in the market.
As a result, the Franc became stronger but began to hurt the country’s exports.
Then the Swiss policymakers placed an artificially cap their currency at 1.20 against the Euro so that CHF won’t be too strong.
To uphold the new policy, the central bank of Switzerland began to print more Franc notes.
Nevertheless, despite these decisions, the Swiss Francs remain a haven for the world of finance, as a stable economic system supports it.
With its stable financial system and good backing, investing in CHF is one of the best decisions you can make for yourself.
For investors in America, the Swiss Franc is lovely due to its low short-term volatility when it comes to exchanging between CHF and USD.
The Swiss Franc is highly liquid and available, and that why it is a haven for investors.
How to Invest
There are different ways to invest in Swiss Francs, and some of them are:
- Exchange-Traded Funds (ETFs)
It is possible to invest in Swiss Francs through ETFs. It is essential to know that CurrencyShares’ Swiss Franc Trust helps to track the value of Swiss Francs when compared to USD.
It is possible to purchase ETFs through brokerage accounts. ETFs don’t cost much to buy.
- Futures and Options
You can invest in the Swiss Franc through futures and options. Lots of traders think that the only way to trade derivatives is through stocks only.
The forex market offers retail traders derivative products to take advantage of the profit opportunities.
The forex market is the platform to trade different currencies. The forex market involves buying and selling.
A trader in the forex market gets his profit when the currency he/she purchases increases in value when compared to the money he/she used to buy it.
When it comes to the Swiss Francs, the USD is the most widely used currency for investment.
Before you invest in Swiss Francs, it is essential to note that the forex market is prone to dips.
Although the Swiss Franc is stable, It can be affected by economic policies and the action of the central bank. Nevertheless, the Swiss Franc is a haven for investments.