AUDCHF is the ticker symbol for the Australian dollar to Swiss franc exchange rate on the Forex markets. Both the Australian dollar and the Swiss franc are considered major currencies, but the AUD to CHF is considered a minor pair because it does not constitute the US dollar (USD). Minor currency pairs typically feature lower liquidity and trading volumes compared to major currency pairs. They are also traded with relatively wider spreads. In particular, the AUDCHF can also be used for carry trade strategies. The Swiss franc is also considered a safe haven currency, whereas the Australian dollar is more responsive to global economic conditions.
In the AUDCHF Forex rate, the AUD is the base currency, whereas the CHF is the quote/counter currency. This means that at any given time, the price of the AUDCHF represents the amount of Swiss franc it would take to exchange for one unit of the Australian dollar (1 AUD to CHF).
History of AUDCHF
The Australian dollar is the official currency of Australia, Norfolk Island, Cocos Island, and Christmas Island. The currency is also used as official legal tender in Tuvalu, Kiribati, and Nauru. The AUD was introduced in 1966 when a move to decimalization saw Australia abandon the complicated Sterling system of the Australian pound. The AUD was initially pegged to the US dollar, but it has been a free-floating currency in the markets since 1983. Australia is an important player in the global economy. The country is ranked 13th by nominal GDP, as of May 2022, and the AUD stands out as the 5th most traded currency in the world. As a nation, Australia’s economy is powered by the famous 3Gs – geology, geography, and government. The country is endowed with natural resources and is a global leader in the export of commodities such as gold, iron ore, and coal. This is why the AUD is often regarded as one of the commodity dollars in the forex markets. Australia also has a unique location on the world map, and in recent years, proximity to Asia has boosted its trade with major countries such as China. The Australian government is also known for making pro-business policies that have helped support and cushion the country’s economy.
On the other hand, the Swiss franc is the official currency of Switzerland and Liechtenstein. Introduced in 1850, the CHF has earned the title of a ‘safe haven’ currency. That is, a currency that investors can trust to maintain or increase its value during periods of global tensions or economic turmoil. The CHF earned this title due to Switzerland’s sound monetary and economic policies as well as a stable economy and political environment. The CHF famously had a long-term Gold-peg that was only abandoned in 2000 via a referendum. Politically, Switzerland is recognized as a neutral state and has notably never engaged in any military confrontation for over 500 years. The CHF was pegged to the euro (EUR) in 2011, but the peg was abandoned in 2015 when the European Central Bank laid plans for a bumper quantitative easing program. The CHF continues to be a very powerful currency and stands as the 7th most traded in the world as of May 2022.
AUDCHF Historical Price Performance
In the early 2000s, the AUDCHF pair traded around 0.80. It then started drifting upwards and by October 2007 it managed to print a peak price above 1.08. During the 2008 global financial crisis, the Swiss franc displayed its safe haven characteristics, with the AUDCHF pair tumbling to around 0.73 by January 2009. A sharp upturn then followed, and the AUDCHF managed to climb above 1.02 by July 2012. Since then, the pair has largely trended lower, and in 2020, it printed a trough around 0.58. There has, however, been a minor recovery, with the AUDCHF currently trading around 0.68.
Major Bodies Influencing AUDCHF – AUD to CHF Trading
When it comes to AUD/CHF trading, here are some factors to consider:
Reserve Bank of Australia (RBA)
As the central bank of Australia, the RBA is mandated to ensure a stable AUD as well as facilitate economic prosperity for the people of Australia. The RBA is known to be an active central bank in the markets, and its news and events have a massive impact on the AUD. The bank releases its official cash rate on the first Tuesday of every month (except January), as well as an accompanying rate statement.
Australia Bureau of Statistics (ABS)
The ABS is Australia’s national statistics agency. It is responsible for collecting, organizing, and publishing vital statistics on the life, economy, and society of Australia. ABS’s most notable indicators that can influence the AUD include the Trade Balance, Unemployment Rate, and Consumer Price Index.
Swiss National Bank (SNB)
The SNB is the central bank of Switzerland. It is mandated to ensure price stability as well as create a monetary environment conducive to economic growth. Like the RBA, the SNB is also very active in the forex markets. The bank releases its rates and accompanying monetary statements quarterly. Its most impactful event in recent years is the Euro-peg removal in 2015.
Swiss Federal Statistics Office (FSO)
The FSO is the national statistics office of Switzerland. It is responsible for producing and publishing important statistics about Switzerland’s society, life, economy, and population. Some of its most important indicators that can influence the CHF include the Consumer Price Index, Unemployment Rate, GDP, and the Trade Balance.
The AUD/CHF pair is positively correlated with currency pairs such as the NZDCHF, AUDJPY, NOKJPY, and NZDJPY. The pair has also displayed a negative correlation with currency pairs such as the EURAUD, GBPAUD, EURNOK, and USDTRY.