What is AUD/CHF?
The AUD/CHF forex trading pair indicates the exchange rate between the Australian dollar (AUD) and the Swiss franc (CHF), or how many CHF it takes to buy one AUD. While both are major currencies, the currency pair is classified as a “cross” currency pair as it does not include the US dollar. AUD/CHF is not as widely traded as prominent currency pairs such as EUR/USD or USD/JPY, but it nevertheless provides opportunities for traders seeking to diversify their portfolio.
What affects the price of the AUD/CHF pair?
The interest rate gap between Australia and Switzerland is one of the most important variables influencing AUD/CHF pricing. If the Reserve Bank of Australia (RBA) or the Swiss National Bank (SNB) boosts interest rates, there will be higher demand for their respective currencies, with a consequent rise in their value.
Commodity prices are another factor that affects the AUD/CHF pair. Australia is a significant exporter of iron ore, coal, and natural gas. As a result, changes in commodity prices can affect the value of the AUD, which is also considered one of the commodity dollars in forex. For example, if the price of iron ore rises, this can increase demand for AUD, causing its value to rise relative to CHF.
Similarly, Switzerland is a major physical gold trading centre and is home to five of the world's most important precious metal refineries, where 70% of global production is melted down and processed. As a result, changes in gold prices could impact the value of the CHF. If gold prices rise, this could increase demand for CHF, causing its value to appreciate relative to the AUD.
Changes in market sentiment can also influence the pair. Because of its low inflation rate and steady economy, the Swiss franc is regarded as a safe haven asset. This attribute makes it particularly attractive during periods of economic slowdown or financial instability, allowing the CHF's value to rise relative to the AUD.
What to watch out for when trading AUD/CHF?
- Reserve Bank of Australia (RBA) and Swiss National Bank (SNB) for Interest Rate decisions and monetary policy decisions
- Australian Bureau of Statistics (ABS) and Swiss Federal Statistics Office (FSO) for data on Trade Balance, Unemployment Rate, Consumer Price Index (CPI), and Gross Domestic Product (GDP)
- Chinese economic data
