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 The Swiss Franc is the fifth most traded currency on the Foreign Exchange Market, having a daily share of 8%. The code used for the Swiss franc in Forex is CHF, which comes from “Confoederatio Helvetica franc”. Confoederatio Helvetica is the Latin name of Switzerland.
Currently the Swiss franc is not only the national currency of Switzerland, but also serves as the national currency to the smaller neighbor country Lichtenstein and to the small Italian comune near the Swiss border named Campione d'Italia.
The Swiss franc is one of the most stable currencies, gaining throughout the history the reputation of a “strong currency”. Before May 2000, the equivalent of 40% of the currency in circulation was backed in gold reserves according to the fiscal laws, making Swiss franc investments very attractive. In the 18th century, in the Helvetic Republic there were hundreds of different coins with different values in circulation because every entity could make its own coins. Only in 1850 the Federal Coinage Act introduced the Swiss franc as the national currency and the Federal Government as the only entity allowed making the money. During the Latin Monetary Union, created in 1865 by Belgium, France, Italy and Switzerland, the Swiss franc received the standard value of 4.5 grams of silver or 0.290322 grams of gold. The currency kept this standard value until 1936 when because of the Great Depression was devaluated with 30%. In 1945, after joining the Bretton Woods system, the Swiss franc was pegged to the US dollar at a rate of $1 = 4.30 francs, but four years later the rate was changed to $1 = 4.375 francs. After a Referendum in May 2000, the 40% gold reserve obligation was dropped and by 2005 only 20% of the currency in circulation being backed in gold reserves. After the appearance of the new currency, Euro, the Swiss franc kept a stable exchange rate of 1.55 CHF per euro. Due to the American economic crisis, the Swiss franc reached in March 2008 for the first time in history an exchange rate higher than 1 US dollar per CHF. Currently the Swiss franc has the following exchange rates:
1 U.S. dollar = 1.0395 Swiss francs
1 Euro = 1.3728 Swiss francs |
