Forex Traders Have Been Buying Swiss Francs
Over recent months Forex traders have been buying Swiss francs for numerous reasons and this continued purchasing has led to the ‘safe haven’ currency climbing to an all-time high against the US dollar. So what is it that’s making the Swiss franc the currency of choice for traders at eToro and other online Forex brokers? Why is the franc so much more desirable than other foreign currencies?
When times are hard and markets are unpredictable Forex traders and investors turn to safe haven currencies such as the US dollar and the Swiss franc in a bid to avoid big losses that can be achieved while trading less stable currencies. As traders across the world have recently been employing risk aversion tactics left, right and centre currencies like the Swiss franc have been in demand. Troubles across the Middle-East and natural disasters in Japan and New Zealand have led Forex traders to the franc in their droves.
As the US dollar has been facing substantial difficulties, with economic growth at a virtual standstill and the US Federal Reserve unwilling to raise interest rates, the Swiss franc has been making headway against its US counterpart. At 8:51am local time in Zurich on 7th June Forex traders at eToro witnessed the mighty franc climb to a record all-time high of 84.81 against the US dollar and is still looking to make further gains as we speak.
The success of the franc has led to concern within the Swiss government, as officials were forced to reduced Switzerland’s 2012 growth forecast. The strengthening franc will certainly be weighing heavy on Swiss exports and manufacturing but will this force intervention by the Swiss National Bank and will a downturn in manufacturing figures devalue the Swiss franc?
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