Forex Markets: Swiss Franc Moves Higher on Safe Haven Buying
During times of market volatility, forex traders will often look to the Swiss Franc as a means for obtaining safe haven protection from dynamic market changes. Switzerland is one of the countries in Europe where bank secrecy is an important issue, and this represents another of the biggest attractions in the currency (not only to domestic but also to foreign clients). The population of the country is still relatively small, however, so investors should utilize a forex broker account in order to secure low transaction fees and easy access to those markets.
Central Bank Policy
Earlier this month (on March 6, 2017), the Swiss National Bank has published its annual report which is showing that the previous problems seen with certain savings and loan entities are now behind them. Compared to numbers seen in 2015 (when the Swiss National Bank recorded a loss of 23.3 billion CHF), numbers in 2016 showed a profit of 24.5 billion CHF and net profit of 21.7 billion CHF. This allows for a payment of 15 CHF per share (which is the maximum amount) and distribution of 1 billion CHF to the confederations and cantons because the net profit is over 20 billion CHF for the year.
Currency Factors
Profit numbers at the SNB are based on business in foreign currency transactions in the amount of 19.44 billion CHF. Of these totals, 8.3 billion CHF is interest income and 3.0 billion CHF comes from dividend income. These improvements were made possible by solving the crisis caused by savings and loans that were tied to the value of the Swiss Franc. These policy changes helped restore confidence in foreign clients, and, by extension, the value of the Swiss Franc itself.
Profit are also generated from business conducted in Francs (in the amount of 1.6 billion CHF), as well as a valuation gain of 3.9 billion CHF (based on gold reserves of 1,040 tons valued at 37.885 CHF per kilogram).
Currency Reserves
By solving the problems the SNB faced in 2015 and (increasing national GDP in the last five years), the SNB has been able to separate the total profit of 4.6 billion CHF in currency reserves from other domestic metrics and the central bank now holds reserves of 62.8 billion CHF.
It is important to note that there has been an increase in the value of the Swiss Franc against the US Dollar. At the end of 2016, the value of 1.00 CHF was equal to 1.016 Dollars and this has helped to define the larger trend for many forex traders. By solving the banking crisis, Switzerland has been able to achieve the realization of favorable results.
All of this indicates that Switzerland is still regarded as one of the most attractive countries to open bank accounts, depositing funds, savings and raising new loans. All of these are factors that should support the value of the CHF going forward.
During times of market volatility, forex traders will often look to the Swiss Franc as a means for obtaining safe haven protection from dynamic market changes. Switzerland is one of the countries in Europe where bank secrecy is an important issue, and this represents another of the biggest attractions in the currency (not only to domestic but also to foreign clients). The population of the country is still relatively small, however, so investors should utilize a forex broker account in order to secure low transaction fees and easy access to those markets.
Central Bank Policy
Earlier this month (on March 6, 2017), the Swiss National Bank has published its annual report which is showing that the previous problems seen with certain savings and loan entities are now behind them. Compared to numbers seen in 2015 (when the Swiss National Bank recorded a loss of 23.3 billion CHF), numbers in 2016 showed a profit of 24.5 billion CHF and net profit of 21.7 billion CHF. This allows for a payment of 15 CHF per share (which is the maximum amount) and distribution of 1 billion CHF to the confederations and cantons because the net profit is over 20 billion CHF for the year.
Currency Factors
Profit numbers at the SNB are based on business in foreign currency transactions in the amount of 19.44 billion CHF. Of these totals, 8.3 billion CHF is interest income and 3.0 billion CHF comes from dividend income. These improvements were made possible by solving the crisis caused by savings and loans that were tied to the value of the Swiss Franc. These policy changes helped restore confidence in foreign clients, and, by extension, the value of the Swiss Franc itself.
Profit are also generated from business conducted in Francs (in the amount of 1.6 billion CHF), as well as a valuation gain of 3.9 billion CHF (based on gold reserves of 1,040 tons valued at 37.885 CHF per kilogram).
Currency Reserves
By solving the problems the SNB faced in 2015 and (increasing national GDP in the last five years), the SNB has been able to separate the total profit of 4.6 billion CHF in currency reserves from other domestic metrics and the central bank now holds reserves of 62.8 billion CHF.
It is important to note that there has been an increase in the value of the Swiss Franc against the US Dollar. At the end of 2016, the value of 1.00 CHF was equal to 1.016 Dollars and this has helped to define the larger trend for many forex traders. By solving the banking crisis, Switzerland has been able to achieve the realization of favorable results.
All of this indicates that Switzerland is still regarded as one of the most attractive countries to open bank accounts, depositing funds, savings and raising new loans. All of these are factors that should support the value of the CHF going forward.