Differences between Investing vs Trading
Differences between Investing vs Trading
The forex currency pair GBP/CHF tracks the exchange rate between the Great British Pound Sterling and the Swiss Franc. The history of the Swiss Franc (CHF) goes back to 1850. Following the Swiss government’s declaration that it would become the official issuer of money in 1848, the Federal Coinage Act was introduced.
This made CHF the official currency of Switzerland in 1850. The Swiss Franc became part of the BrentWood System in 1945 and was pegged to the US Dollar. The CHF was also pegged to the Euro in 2011 but, by 2015, it had decoupled from it.
Sterling is the oldest currency in the world, which means GBP traces its roots back to the Roman era. Today, GBP is the fourth most-traded currency in the forex market and, as such, it forms part of many popular currency pairs. GBP/CHF is among the top 20 most traded forex currency pairs in the world, accounting for approximately 0.73% of the market’s total trading volume.
The GBP to CHF price can be traced back to 1975. As per the Bank of England’s data, GBP/CHF opened at 5.96 CHF to 1 GBP. The GBP/CHF price has gradually declined since that point but, since 2010, it’s remained relatively stable within the range of 1.4:1 – 1.1:1.
Why trade the GBP/CHF forex price?
GBP to CHF has a long history as a tradable forex pair. Although the GBP/CHF price has fallen since tracking started in 1975, it’s remained stable for more than a decade. Although there are ups and downs, the swings aren’t as significant as they are for other currency pairs due to the relative strength of GBP and CHF. What’s more, daily trading volume for GBP to CHF is consistent, which means this currency pair doesn’t typically encounter liquidity issues.
Trading allows you to speculate on price movements without owning an underlying asset. When you invest in something, you’re buying a piece of it. That means you can only profit if the value of the asset increases from the point at which you bought it.
With trading, you aren’t buying a piece of the asset. Instead, you’re speculating on the asset’s value. This allows you to take a long position and profit when its value increases or take a short position and profit when its value decreases. This can be useful when you trade GBP to CHF (trade GBP/CHF) because forex markets can be volatile.
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* The spreads provided are a reflection of the time-weighted average. Though Skilling attempts to provide competitive spreads during all trading hours, clients should note that these may vary and are susceptible to underlying market conditions. The above is provided for indicative purposes only. Clients are advised to check important news announcements on our Economic Calendar, which may result in the widening of spreads, amongst other instances.
The above spreads are applicable under normal trading conditions. Skilling has the right to amend the above spreads according to market conditions as per the 'Terms and Conditions'.
What affects the currency pair GBPCHF?
One of the main factors that affect the currency pair GBPCHF is economic data and news coming out of both the United Kingdom and Switzerland. This includes reports on inflation, unemployment, GDP growth, government policies and political developments in these countries. In addition to this, wider geopolitical events can also affect the GBPCHF pair as changes in risk appetite can cause fluctuations in the value of both currencies individually.
Additionally, changes in interest rates and central bank policies have a bearing on the currency pair, as these can affect investors’ demand for both GBP and CHF independently or in conjunction with each other.
When is the best time to trade the GBP/CHF?
The GBP/CHF is an important currency pair in the global foreign exchange market. The UK and Switzerland have strong economies, making this pair a key indicator of international economic health. As such, it can be tricky to determine when the most opportune time to trade GBP/CHF is. Generally speaking, traders should focus on the times when both the UK and Swiss markets are open. This is typical during London trading hours, which are 8am to 4pm GMT. These are also the busiest hours for this pair, as more traders are likely to be active during these times.
How to trade GBP CHF?
Before trading GBP/CHF, it’s important to understand the fundamentals of the exchange rate. The Great British Pound (GBP) is the official currency of the United Kingdom and is considered a reserve currency. The Swiss Franc (CHF) is the legal tender in Switzerland and Liechtenstein, and is also used as an international currency.
Traders looking to trade GBP/CHF will benefit from studying both economic calendars for news related to each country’s currency. Key events, such as the UK’s interest rate decisions or Switzerland’s National Bank releases can have a significant impact on the exchange rate. When it comes to trading GBP/CHF, there are a number of strategies that traders can use to take advantage of price fluctuations.
Why Trade [[data.name]]
Make the most of price fluctuations - no matter what direction the price swings and with low capital investment.