63.21 % of retail investors lose their capital when trading CFDs with this provider.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63.21 % of retail investors lose their capital when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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Academy How to trade USDCHF

USDCHF – Definition and Characteristics

The USDCHF pair is one of the major currency pairs in the world. It is nicknamed the "Swissie," thus, if someone is speaking about the Swissie (dollar), it is the USDCHF pair.  

The Swissie

The CHF in this pair is the Swiss Franc, also known as the Swissie. The USD in this pair is the US dollar, also known as the greenback, or the buck. The quotation of the pair says to traders how many Swiss Francs are needed to buy one US dollar. When USDCHF trades below parity (lower than 1.0), it informs us that the US dollar is weaker than the Swiss Franc. However, sometimes the pair jumps above parity, and then the greenback becomes stronger than the Swissie.

Thus, the value of the USDCHF pair is quoted as 1 US dollar per X Swiss Francs. Meaning, if the pair is trading at 0.95, it requires 0.95 Swiss Francs to buy one US dollar. If the USDCHF pair rises to 0.97, it means that the greenback has strengthened (the Swissie has weakened), and it now takes 0.97 Swiss Francs to buy one US dollar. On the other hand, if the USDCHF pair drops to 0.90, it means that the US dollar has weakened (and the Swissie has strengthened), and it now takes 0.90 Swiss Francs to buy one US dollar.
 

Correlation

The USDCHF pair is nearly always negatively correlated to the EURUSD pair. Considering there are only a few, if any, macro news which move the Swiss Franc, traders usually assess the EURUSD pair and its fundamental situation when trading USDCHF.
If the EURUSD pair rises (for whatever reason), the USDCHF pair goes down almost every time. On the other hand, if the EURUSD pair drops, the USDCHF pair usually rises.

 

Lowest interest rate

The Swiss Franc is known for its lowest interest rate in the world (from the G20 currencies). As of May 2020, the Swiss National Bank maintains the primary interest rate at -0.75%. Therefore, the Swiss Franc is the main refinancing currency (along with the Japanese yen) of the Carry Trades. In early 2019, when the yield difference between the USD and the CHF was nearly 3%, it was one of the best pairs to benefit from Carry Trading. However, as of 2020, the possibility of Carry Trades is no more as the Fed slashed rates to zero after the coronavirus sell-off in equities.

 

Safe-haven status

Due to Switzerland's stable political and financial position, the Swiss Franc is considered as a safe-haven currency. The US dollar is regarded as a safe-haven currency as well; therefore, in troubling times, it's challenging to decide which currency to buy. In this case, the movement of the EURUSD pair usually hints at what will happen with the USDCHF pair.

However, when trading the Swiss Franc against other currencies, it behaves like a safe currency – it strengthens in bad times and tends to weaken during risk-on sentiment.
 

Performance

As you can see from the weekly chart, the USDCHF pair has been moving sideways forever. The large up and down spike in the price was in January 2015, when the Swiss National Bank abandoned its EURCHF 1.20 peg, which caused the Franc to appreciate massively. However, the USDCHF pair recovered quickly, and the greenback failed to maintain its bullish trend, despite rising rates in the USA.
 

Source: Purple Trading Metatrader 4


The sideways trend could continue over the next months as there is no fundamental news that might derail this trend. As there is no yield difference and no possibility to do Carry Trades in this pair anymore, some investors and traders could leave this not-so-interesting pair and start focusing on other FX pairs or crosses.
 

USDCHF – Quotes and trading 

If you open our Purple Trading Metatrader 4 platform, right-click on the USDCHF pair and choose "new order," the following popup will appear:


Source: Purple Trading Metatrader 4
 

As you can see, the spread between the Ask and the Bid price is 0.7 pips, but the spread can fluctuate slightly, mainly during volatile times of the day. 

Lot value calculation

The minimum amount to trade is 0.01 lot, while one full lot represents 100,000 USD. So, if you are trading 0.01 lot (or a micro lot), you will be trading 1,000 USD. The 0.1 lot is also called a mini lot and represents 10,000 USD. If you want to buy or sell half a lot, you will be trading 50,000 USD. Two lots are 200,000 USD and so on.
Besides, you can open a market execution trade, which means that it will be done at the current market price, or you may use pending orders – limit and stop orders. Finally, it is possible to use the stop-loss and take-profit orders when opening the trade, or you can add them later when the deal is live.

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Nejčastější otázky a pojmy

Aussie
Show answer
Aussie is a slang term for Australian It is sometimes used specifically for the AUD/USD currency pair.
BOC - Bank of Canada
Show answer
BOC is the central bank of Canada.
Lot
Show answer
The basic unit of traded volume. For currency pairs, it is 100,000 units of the base currency. Lot size varies between individual CFD-type instruments as it is based on the number of contracts set for each one.

 
Micro-lot
Show answer
A micro-lot is a trading unit derived from the standard trading unit, which in the Forex world is the lot. While 1 lot represents a transaction of 100,000 units of the currency mentioned first in a currency pair, the value of 1 micro lot is 1,000 units.

If you are interested in the relationship between lots, micro-lots, leverage, and margin, we recommend reading the article about micro-lots we wrote on the subject.

A micro lot is 0.01 lot.
Mini lot
Show answer
A mini lot is a volume of 0.1 lot.
Quote currency (counter currency)
Show answer
It is the second currency in the currency pair. For example, in the EURJPY pair, the quote currency is JPY.
Swap
Show answer
A fee charged for holding a trading position overnight. It is expressed in points or percents and it is directly proportional to the volume of the trading position held. Please note the Swap for Forex pairs and precious metals is being charged 3x on Wednesday, which includes also the weekend swaps. (Swap is charged at Wednesday - Thursday midnight) For other symbols is being charged 3x on Friday. (Swap is charged at Friday - Saturday midnight)
63.21 % of retail investors lose their capital when trading CFDs with this provider.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63.21 % of retail investors lose their capital when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63.21 % of retail investors lose their capital when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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CFDs with underlying asset a virtual currency pair are complex, extremely risky, and usually highly speculative and entail a high risk of losing all the invested capital and therefore are not appropriate for all investors. The values of virtual currencies values are subject to extreme price volatility and therefore may result in significant loss over a short period of time. Clients should not engage in trading in CFDs with underlying asset a virtual currency pair unless they have the necessary knowledge in this specific product; or if they can bear the loss of the entire invested amount. For more details please see the Risk Warnings and Disclosures.


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