I looked up the exchange rate Swiss Franc history charts at one of the research sites I occasionally use and was startled with what I had found. I don’t think you have to be a rocket scientist to figure out the implications of the charts I present below, the story is obvious. Today I am going to present the case that the Swiss Franc is the only legitimate remaining safe-haven currency. I had been originally researching a different topic to present however the charts were so overwhelming I had no choice but to change the focus of my presentation.

The New Millenia Exchange Rate Swiss Franc History

The Swiss Franc has always been kind of a “currency of safe haven” for many years but was traditionally used sparingly due to the relatively low volume and more attractive rates to be found elsewhere in deeper markets (read: USD, GBP, EUR). People today still go to sleep at night under the delusion that the US Dollar remains the safe haven in times of market stress – but in all honesty it is only the depth of the US market that makes it relevant today. The people with monetary assets to protect want less and less to do with US Dollars and prefer the only remaining safe-haven currency: the Swiss Franc (see current Swiss Franc exchange rates).

Consider the chart below.

Chart 1: Swiss Franc Exchange Rate vs. US Dollar (click for larger image):

I don’t have to say much about this chart. It speaks for itself. While the US Dollar picked up a point or two against most currencies in the aftermath of Lehman (including the CHF), it has since reversed course with the multiple rounds of quantitative easing and US industry / bank bailouts. But hey, the US created a lot of this mess, right? So we should expect the US dollar to face some pain as the global markets adjust to the mortgage and default swaps defaults.

Shouldn’t the Euro Take the Place of the US Dollar as Safe Haven?

So perhaps we should expect the Euro to be a reserve currency / a safe haven currency? After all, the Euro represents a population and economy of greater scale than the US right? In a word, No. The European Union has done an equally dreadful job of managing their finances as well, leaving a series of soveriegn debt defaults looming over perhaps as many as 5 European Union nations. What does the forex market have to say about the safety perception vis a vis the Euro? Uh oh… more charts…

Chart 2: The Exchange Rate Swiss Franc History vs. Euro (click for larger image):

So what are we seeing here? Capitulation anyone? But hey, honestly what did we expect to see given all the debt problems the PIIGS are facing? The ECB has put together multiple bailouts to continue to keep the ship afloat over there but one or more of the debtor nations over there is going to default, and the ECB nations who own Greek or Irish or Spanish debt are going to take the hit. Domino effect or not, the European Union nations are facing asset write downs of a significant scale which will either take the euro down with it, either by continued bailouts or re-capitalizing the “surviving” institutions and sovereigns.

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Maybe the Emerging Chinese Tiger Is the New King Currency

But there must be another candidate, right? Howabout the Chinese? They’ve been buying ECB debt like mad, right? Hows the Yuan holding up against the CHF? I’ll skip the chatty remarks – here’s the chart.

Chart 3: Swiss Franc Exchange Rate vs. Chinese Yuan

So here we are, a currency exchange rate pair which at least isn’t a pure parabola. Of course if you shorten your time horizon to post-Lehman the chart looks a little different but whatever. The point is that the Yuan is not appreciating against the Swiss Franc, the end. Period. Still not a contender for the forex market safe-haven status, particularly given the drastic interest rate increases they have undertaken in the last few years.

Exchange Rate of Swiss Francs in Gold – Is Gold The Safe Haven of Choice?

Gold bugs out there I’m sure have been screaming at their monitors this entire diatribe that “It’s Gold baby!” Well, do we have a chart for that Monty? We may have a winner folks… and TA DAH!!! I hope you can forgive the small ounce increments in the chart as we wanted to remain consistent (picture / direction – wise) with the other charts in the series. Gold stands out as the only asset rising against the only safe haven currency standing.

Chart 4: Swiss Franc Exchange Rate vs. Gold (Click for larger image):

And here we have the ultimate answer. The exchage rate Swiss Franc history indicates that traders needing cash outflows from their investments continue to pour money in the Swiss Franc while those trying to preserve their purchasing power – forgoing currency outflows are buying gold.

Trading foreign currency and or commodities involves substantial risk. Lower capital investors might consider binary options trading as a less capital-intensive way to participate in the foreign exchange and commodities markets.