These are the 6 most used currencies by traders! Do you want to try?
As we all know that the forex market is the largest financial market and also the most liquid market. The value of a number that spins in this market every day can reach trillions of dollars.
For those of you who have just entered and become traders in the forex market, we strongly recommend that you get to know some of the most widely traded currencies in the world.
- United State Dollar (USD)
The most important and most easily traded currency is USD. USD is often paired with various other currencies and acts as an intermediary in currency transactions. This is because the USD acts as a global reserve currency performed by almost all Central Banks in the world.
USD currency can also be widely accepted by other countries and can act as an alternative payment.
2. Euro (EUR)
The second most traded currency in the world is the Euro and this currency is also the second largest reserve currency in the world. The euro is the official currency of the majority of countries in Europe and was introduced to the world market in 1999.
As the Euro becomes the official currency of the countries of Europe, many other countries are pegging their money against the Euro. The reason is to stabilize the exchange rate of their currencies.
3 Japanese Yen (JPY)
The yen is another easy currency to trade from Asia and is used by the public to assess the strength of Japanese manufacturing exports. As Japan’s economy moves, the Japanese Yen will also experience movement.
In addition, many also use Yen to measure the situation of other countries such as the economies of South Korea, Singapore and Thailand. This is because the currencies of these countries are slightly traded in the global forex market.
Yen currency is also well known among forex traders as its role in carry trade .Japan basically has a zero interest policy in the 1990s and 2000s and traders borrow Yen at no cost and use it to invest in other currencies that generate more through interest rate differences.
4.Great British Pound (GBP)
The currency most traded on the forex market is GBP or Pound which also acts as a reserve currency because of its relative value compared to other global currencies.
The unique thing about Britain is that this country chooses not to adopt the Euro as the official currency of their country and to retain Pounds. The reason is very simple: a sense of pride in the history of currency and the ability to control domestic interest rates.
Forex traders often use the pound value to assess the strength of the UK economy and the conditions of political stability and government. Because the exchange rates are relatively high with their partners, pounds become an important currency benchmark for many countries and is very liquid in the forex market.
5. Swiss Franc (CHF)
Switzerland with its currency Franc is seen by many as a neutral currency. Many people consider the Swiss Franc to be a very safe place in the forex market, this is because its value tends to move with a negative correlation to more stable commodity currencies such as the Canadian Dollar and the Australian Dollar.
6. Canadian Dollar (CAD)
The last currency that many traded in the world is Canadian Dollar or often called Loonie. Loonie is the world’s leading commodity currency because it operates in commodity markets, especially crude oil, precious metals and minerals.
Canada, which is a major exporter for commodities, makes the Loonie highly fluctuate against crude oil price movements. Many traders trade Canadian dollars to speculate on the movements of these commodities and to protect their value from the contracts they hold.
In addition, because Canada is very close to the United States, the economy and its currency are closely related to the economic power in the United States and also the movement of US dollars.
As we all know, each currency has certain factors that will affect its value and movement against other currencies in the forex market. As a trader you should understand well some of the currencies that affect the forex market.
Understanding the basic knowledge as the explanation that we have conveyed above is very important to be done by newbies who just entered the world of forex trading. Without good knowledge with regards to the base that exists in the forex market it will be very difficult to get the expected profit.
You can read various other knowledge bases that we have already explained here to establish the basis for trading on the forex market. If from the explanation above there are things that are still not understood you can ask us through the comments column below. We’ll be happy to answer any incoming questions for you.
That’s the explanation we can share for you all, hopefully it will give you a lot of inspiration and knowledge to you who have read it.