For some of us who might not be privy to the longer time-condensed chart of the USD.CHF, it may come as a surprise that for the first time in the history of forex (going back to 1989, at least) this pair has now found its lowest low. One of the fundamental reasons for this phenomenon can be attributed to the unrest in the Middle East, particularly in Libya, which for many years has had fiduciary interests in Europe. Now the discussion has turned to European refineries and what might happen to the oil that once flowed into those refineries from Libya when the Gadafi regime finally falls.

One interesting implication in this grand drama is how this turn of events has triggered such massive fear that so many investors have chosen what for the longest time has been the currency of the greatest perceived value. Since Switzerland has a historical reputation of being a neutral country in all instances of warfare, and since it is the most widely recognized institutional establishment of finanical security regardless what source might be channelling funds into its land-locked banking fortresses, is it really any wonder why the Swiss Frank is currently trading at its highest level against the U.S. dollar since the early inception of the forex markets?

On a more poetic note, for all traders whose interest it is to exploit and profit from such turn of events as we are witnessing today in the Middle East, not only is the Swiss Frank the currency of choice on which to be keeping a watchful eye. Either in some small or large way everything effects everything else; and , in this regard, we must remember that nothing is so ever-present as the Black Swan waiting with abated breath and, without the faintest of warnings, sweeps down upon its prey, pulling it back from the depths of financial oblivion. The strength of the Swiss Frank is a double-edged sword, for in its strength there also lies its weakness. And although to the inexperienced eye the acrobatic feat performed by the Black Swan appears to be one of aggression, what appears to be a bird of prey, in truth is a disguised ally.

JCD