The CHF in this pair is the Swiss Franc, also known as the Swissie. The USD in this pair is the US dollar, also known as the greenback, or the buck. The quotation of the pair says to traders how many Swiss Francs are needed to buy one US dollar. When USDCHF trades below parity (lower than 1.0), it informs us that the US dollar is weaker than the Swiss Franc. However, sometimes the pair jumps above parity, and then the greenback becomes stronger than the Swissie.
Thus, the value of the USDCHF pair is quoted as 1 US dollar per X Swiss Francs. Meaning, if the pair is trading at 0.95, it requires 0.95 Swiss Francs to buy one US dollar. If the USDCHF pair rises to 0.97, it means that the greenback has strengthened (the Swissie has weakened), and it now takes 0.97 Swiss Francs to buy one US dollar. On the other hand, if the USDCHF pair drops to 0.90, it means that the US dollar has weakened (and the Swissie has strengthened), and it now takes 0.90 Swiss Francs to buy one US dollar.
The USDCHF pair is nearly always negatively correlated to the EURUSD pair
. Considering there are only a few, if any, macro news which move the Swiss Franc, traders usually assess the EURUSD pair and its fundamental situation when trading USDCHF.
If the EURUSD pair rises (for whatever reason), the USDCHF pair goes down almost every time. On the other hand, if the EURUSD pair drops, the USDCHF pair usually rises.
Lowest interest rate
The Swiss Franc is known for its lowest interest rate in the world
(from the G20 currencies). As of May 2020, the Swiss National Bank maintains the primary interest rate at -0.75%. Therefore, the Swiss Franc is the main refinancing currency (along with the Japanese yen) of the Carry Trades. In early 2019, when the yield difference between the USD and the CHF was nearly 3%, it was one of the best pairs to benefit from Carry Trading. However, as of 2020, the possibility of Carry Trades is no more as the Fed slashed rates to zero after the coronavirus sell-off in equities.
Due to Switzerland's stable political and financial position, the Swiss Franc is considered as a safe-haven currency.
The US dollar is regarded as a safe-haven currency as well; therefore, in troubling times, it's challenging to decide which currency to buy. In this case, the movement of the EURUSD pair usually hints at what will happen with the USDCHF pair.
However, when trading the Swiss Franc against other currencies, it behaves like a safe currency
– it strengthens in bad times and tends to weaken during risk-on sentiment.