DEFINITION of Swissie
Swissie is a slang term used by the investing community for the Swiss franc. The Swiss franc, or Swissie, has often been considered a safe-haven currency during times of geopolitical unrest. This is mainly due to Switzerland’s neutral stance in global conflicts.
BREAKING DOWN Swissie
Swissie may also go by the term Swissy. One may hear in a news report that the Swissie was down in the day’s trading. This is similar to the U.S., where the dollar may be referred to as the greenback; Canada, where the dollar may be called a loonie; and New Zealand, where the dollar may be called a kiwi.
Demand for the Swissie, or Swiss franc, tends to grow during global recessions and financial crises. Switzerland is known to have a stable and relatively recession-proof economy because of its low unemployment rates, recession-resistant industries such as chemicals, high-tech engineering and power, and its conservative monetary policies. Switzerland also has low debt, low inflation and is fairly stable politically.
Switzerland is known for its neutral stance on international issues. It has historically rejected alliances that would involve economic, political or military measures. Additionally, the Swiss government system calls for referendums on all laws of importance, and any citizen has the opportunity to propose a constitutional amendment.
Investors are enticed to Switzerland and by the Swissie because of the liquidity in the markets, where investors can get in and out with little costs. Also, the government tends to shy away from controlling the currency. Seeing as the Switzerland constitution states that the government must retain gold reserves, its gold reserves are historically strong. In fact, the Swissie has the highest gold backing of any major world currency.