The NZD/CHF currency pair is an exotic trading asset for long-term transactions!
The NZD/CHF currency pair shows the ratio of the national currencies of New Zealand and Switzerland. It is characterized by low liquidity compared to the major assets of the Forex market.
The New Zealand currency is dependent on the volume of agricultural products in its country, which determines it as a commodity asset. The Swiss franc is guided by the position of the economy and oil exports, and also has the status of a safe-haven currency in which investors prefer to keep their capital in times of crisis.
The NZD/CHF exchange rate indicates how much the Kiwi dollar (New Zealand) is worth in franc equivalent. At the same time, the dynamics of the pair is interconnected with the behavior of other assets, in particular, "euro-dollar", "pound-dollar", "dollar-franc", "dollar-yen".
Analysis of the constituent parts of the NZD/CHF currency pair
The New Zealand dollar has the common name "kiwi", as the ancient bird is one of the symbols of the country. It performs the function of the official currency for its country and the islands adjacent to it. It is considered a young currency, since British pounds were previously in circulation.
New Zealand is a southern island state, its economy is focused on the production of agricultural products, as well as the provision of various services.
The economic structure is as follows:
- The sector of banking, consulting, educational and restaurant services accounts for 71 percent of GDP;
- The mining and manufacturing sector accounts for 24.3 percent of GDP;
- The profitability of the agricultural area is 4.7 percent.
The Swiss franc, or Swissy, is the national currency of Switzerland and Liechtenstein. The issue belongs to the main bank of the country. This currency is characterized as the most stable in the world market, and has fixed gold and foreign exchange reserves at the level of at least 40 percent. It has a zero inflation rate.
Switzerland is a European state with a developed economy and high technology. It has close cooperation with the Eurozone and countries of other regions. Its economic structure is presented as follows:
- 73.4 percent of GDP falls on the service sector;
- 25.9 percent of GDP is the highly developed industrial sector;
- 0.7 percent of GDP is formed from agricultural products.
One of the key roles in the Swiss economy is played by international investment and tourism.
Features of the behavior of the NZD/CHF currency pair on the chart
The asset is quite exotic and volatile, as well as controversial from the point of view of the economies of the states whose currencies represent the pair. They are combined with each other, complementing and compensating each other. So, Swissy acts as a guarantor of stability and predictability, it is convenient in all methods of analysis, and kiwi adds volatility and price fluctuations to the duet.
When analyzing a pair, it is important to take into account such key factors that affect the movement of the chart:
- The cost of gold on the world market;
- The cost of oil on the world market;
- Trade balances of both countries;
- Economic macro statistics, including those of the European Union, Australia and the United States;
- Investment flows in the Swiss economy;
- Central Bank rates;
- Dynamics of inflation indicators;
- The value of goods in the agricultural sector;
- Weather and climate features in New Zealand.
The highest correlation can be traced with the Kiwi-Dollar, Aussie-Dollar, Euro-Kiwi, Dollar-Swissie pairs.
Interesting facts about the NZD/CHF currency pair:
- The first modern New Zealand dollar was put into circulation in 1999, the material is thin plastic so that banknotes can remain in circulation as long as possible;
- The dollar bills feature portraits of Queen Elizabeth II, Ernest Rutherford, Edmund Heeler, Kat Shepard;
- The Swiss franc has existed since 1850 and has only changed its appearance twice;
- The Swissy is considered the most stable currency in the world and acts as a safe-haven currency;
- The Swiss franc has zero inflation and is used as the international currency for paying trademark registration fees and charges.
How to trade the NZD/CHF currency pair?
The trading pair is suitable for carry trade transactions on(due to the difference between the refinancing rates). Despite the fact that the asset is not included in the list of majors, it attracts the attention of a certain circle of traders.
When working with a couple, it is important to consider the following features:
- There are practically no fast bursts of activity, most of the time the asset is in lateral movement;
- The trend is formed in the medium or long term; Volatility is not constant, it can be less than 100 points during the day, and it can be more than 300 points;
- The asset is easily predictable, which is due to the behavior of the Swiss franc, you can apply fundamental analysis and navigate in retrospect;
- There is low liquidity, but the pair is pegged to the US dollar;
- Complex correction patterns often appear on the chart.
Live chart for the NZDCHF currency pair is an ideal solution for those who do not want to install MT4 for analysis.