Forex, or also known as foreign exchange, is one of the most popular markets when it comes to investors and speculators. The markers are liquid and huge, and trading can be conducted on a 24-hour basis. Sometimes the leverage in the system might be enormous. This type of trading gives you unique opportunity to trade with fortunes of countries and economies.
In this topic we would like to pay attention to Switzerland and its foreign exchange market. The country has always had great significance to the global community, and one of the main reasons for this is its currency. The Swiss franc is takes the 6th place in the most traded currency ranking.
Interesting fact is Switzerland’s GDP is 19th in the world. Despite the reputation for prudence and conservatism, the franc is not a common reserve currency.
Best Forex Brokers for Traders in Switzerland
The central bank that regulates the market is the Swiss National Bank. SNB targets to make the inflation rate consistent and not more than 2%. Overall, the economy of Switzerland is small but has a huge significance in the global banking and financial community.
What makes more than 11% of the GDP of Switzerland is its financial services. The country has really strict policy when it comes to bank secrecy and neutrality. This is why the Swiss banking sector is well-known worldwide and it is a preferred destination for global funds.
There are a couple of theories trying to explain the foreign exchange rates and the success of Swiss franc. First – purchasing power parity, the Fisher effect, interest rate parity and payments balance. All of those theories are trying to explain the fluctuations of exchange rates based upon different factors such as price levels, interest rates and so on.
Actually in practice these models do not work in real markets, but it is really important for you to have some knowledge regarding Swiss Franc and how to trade with it successfully. Here is a list of brokers that are trading with Swiss franc and which you might want to try.