If we speak about emergency currency, the first idea, which comes to the investor’s mind is the Swiss franc. It’s easy to get why this happens. Switzerland always demonstrated independence and didn’t take an active part in the world’s history.
A lot of experts think that the Eurozone is becoming a transfer union now. Germany and France are obliged to bear the debts of its members. It hurts the economy and the currency in particular.
This matter of things isn’t going to change drastically shortly. That’s why investors wish to convert Euro assets into other currencies. The Swiss franc is one of the most popular hopes. However, it isn’t so.
In 2019, the bond yields in the country dropped by 0.11%. At the same time, franc became the instrument for speculations due to high demand and bounded supply.
As long as a currency depends a lot on what the national bank is doing, it’s easy to realize that speculation on a large scale and political interests are the causes of hype. Even though Switzerland isn’t active on the world arena, it can benefit from the conflicts there.
Now we can understand why the investors get more interested in Scandinavian currencies, and mostly in the Norwegian krone.
The economy of Norway was on the rise within the period of 1999-2019. That’s why its GDP was one of the most significant worldwide, and the trade balance was decisive enough. But the investors dealing with technical indicators are scared to invest in the Norwegian krone because the currency is bounded with oil.
This is undoubtedly true, but working with the currency can provide easy entry into the market. Between 2000 and 2010, the CHF/NOK par wasn’t accessible, but along with the Eurozone’s swinging, it gets more attractive.
As long as in 2011 the Central Bank of Switzerland refused from pegging to euro, and the pair is in active use from nowadays. The average discount rate of 8.5 NOK for 1 franc.
That’s the golden mean to which the pair is aiming and which causes changes in the discount rate. This standard brings convenience to the traders because it helps in distinguishing the trend. The trade corridor varies from 8 to 88 NOK per franc.
In July 2019, the exchange rate hit the price limits. It happened because of a fall in the cost of oil, which weakened NOK and strengthened Swiss financial policy.
However, by the beginning of August, the oil cost started to grow rather fast, which provoked equalizing the situation with the CHF/NOK pair and a trend reversal.
This stable variability was neglected by the majority of traders who were involved in trading classic pairs. Due to this, the CHF/NOK is considered to be less speculative and prone to abnormal pressure.
To get a benefit, you have to learn the power of waiting. From time to time the pair demonstrates high variability and makes changes in the trading corridor within a week. Sometimes it’s going to take from two to three months.
This situation makes it aimless to speak about the scalping or the ability to make extra-beneficial transactions fast. On the contrary, the trader has low risks.
People with significant capital can use the pair because the benefit is got fully and on a one-time basis. The long-time ranges are also provided.
Moreover, these transactions can lead to a significant influence on the psyche. That’s why it’s good for those who can control their emotions. In this case, they won’t harm their health. Any quick decision can provoke significant money loss.
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