The EURCHF is the abbreviation for the Euro against the Swiss Franc. For traders on the forex market, the correlation between the euro and the Swiss franc currency pairs is too strong to be ignored. The EUR/CHF (euro/Swiss franc) currency is driven by the currency pairs—USD/CHF and EUR/USD. For two separate and distinct financial instruments, a 95% correlation is close to perfect. However, arbitraging the two currencies, in an attempt to capture the interest rate differential, does not work. Over the long term, most currencies that trade against the U.S. dollar have a correlation above 50%. This is because the U.S. dollar is a dominant currency involved in 90% of all currency transactions. Furthermore, the U.S. economy is the largest in the world, which means that its strength impacts many other nations. Although the strong relationship between the EUR/USD and USD/CHF is partially due to the common dollar factor in the two currency pairs, the relationship is far stronger than that of other currency pairs, due to the close ties between the eurozone and Switzerland. Surrounded by other members of the eurozone, Switzerland has close political and economic ties with its larger neighbors. Because the two economies are intimately linked, if the eurozone contracts, Switzerland will feel the ripple effects.