Swiss miss

The Swiss franc, popularly known as Swissy among the forex trading crowd, was made the official currency of the Helvetic republic way back in 1798. The code CHF which is currently assigned to the currency is the acronym of the Latin Confoederatio Helvetica franc. The Helvetic republic has since changed its name to Switzerland, but kept the franc as its national currency.

Throughout the 20^th century the Swiss franc has proven to be the strongest and most stable currency in the world, probably due to Switzerland’s refusal to get involved in any of the century’s wars, thus sparing it war time upheavals and recessions. It is this reputed stability that makes it the fifth most traded currency in the forex market, as well as the fifth most widely held reserve currency. It’s appeal is also boosted by its history of almost zero percent inflation throughout its existence, mainly due to the Swiss law which states that the circulating currency must be at all times backed by at least 40% in gold reserves.

This law however was abolished in the year 2000, making the Swiss franc fair game in the forex market and liable to the same peaks and dives as the rest of the world’s free floating currencies. At first the Swissy honorably defended its status against the new born euro, ranging slightly around the 1.55 mark. Since early 2006 however, the battle has become a losing one, and in early 2008 the Swiss franc opened its year against the euro at 1.65.

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