Question

Find the historical exchange rate of US dollar to CHF (Switzerland) and explain if the currency has appreciated or depreciated in relation to the US dollar. List some examples as to why this might have happened. For instance, an international event (one event is fine). Approach this from the event side, explore what happened to the exchange rate as an outcome of this particular event.

Answer 1

1 USD= 0.97 CHF.

This data above refers to the exchange rate between the US Dollar and the Swiss Franc. This means one can get 1 USD for 0.97 CHF or we need to spend 0.97 CHF to get 1USD. The trend from the past 10 years indicate the exchange rate has been around a similar mark. Only in certain years there was a negative change in the rate. Like in 2019 the annual change was -1.67% and 2017 witnessed a -4.39%.

Of the various factors that effect the exchange rate, GDP and country’s employment data have a major impact. The Swiss Frac has apricated, i.e it costs lesser to get one dollar since the county has a more stable political and financial position. Comparatively USD has depreciated, i.e it costs more UDS to buy 1 CHF.

In the past the loose monetary policy has led to a decline in the demand for dollar and increased the demand for CHF. The Swiss Frac observed a sudden surge due to the removal of the peg in 2015. Prior to 2015, CHF was pegged to the Euro at 1.20. When the national swiss bank removed this beg, the currency immediately was a surge by 25% in comparison to the USD. Since then its been a great opportunity for investors and the currency has been appreciated till now