DEFINITION of 'USD/CHF (U.S. Dollar/Swiss Franc) '
The abbreviation for the U.S. dollar and Swiss franc (USD/CHF) pair or cross for the currencies of the United States (USD) and Switzerland (CHF). The currency pair shows how many Swiss francs (the quote currency) are needed to purchase one U.S. dollar (the base currency).
Trading the USD/CHF currency pair is also known as trading the "Swissie".
BREAKING DOWN 'USD/CHF (U.S. Dollar/Swiss Franc) '
The value of the USD/CHF pair is quoted as 1 U.S. dollar per x Swiss francs. For example, if the pair is trading at 1.50 it means that it takes 1.5 Swiss francs to buy 1 U.S. dollar.
The USD/CHF is affected by factors that influence the value of the U.S. dollar and/or the Swiss franc in relation to each other and other currencies. For this reason, the interest rate differential between the Federal Reserve (Fed) and the Swiss National Bank (SNB) will affect the value of these currencies when compared to each other. When the Fed intervenes in open market activities to make the U.S. dollar stronger, for example, the value of the USD/CHF cross could increase, due to a strengthening of the U.S. dollar when compared to the Swiss franc.
The USD/CHF tends to have a negative correlation with the EUR/USD and GBP/USD currency pairs. This is due to the positive correlation of the euro, Swiss franc and the British pound.