Learn to Trade

The Six Major Currencies

By No Comments

The US Dollar  

The first currency which is the US Dollar dominates the world foreign exchange. It is the base or universal currency to evaluate and other currency traded on forex. Most commodities like metal and oil are denominated in US dollars. Because of this, any fluctuation in supply and demand have direct impact on the US dollar value. US dollar is considered a safe-haven currency. Most investors move towards the dollar when economic conditions fall 

The Euro (EUR) 

The Euro is the second most dominating currency in the forex market. The Euro has a strong international acceptance streaming from the members of the European Monetary Union. The Euro is used by 18 member countries of the EU. The forex transaction by the Euro is currently accounted for almost 37%. The main factors that influence the acceptance of Euro’s prices is often based on the economies of the developed countries that use the common currency.

The Japanese Yen (JPY)  

In Asia, the Japanese yen is the most traded and dominating currency. It is the third most popular or traded currencyThis currency represents almost 20% of the world’s exchange. The demand to trade the Yen comes mostly from the Japanese Keiretsu. The Japanese stock market and real estate market correlate with the volatility of the Japanese yen (JPY). The Japanese economy is mostly an industrial exports economy. Traders also considers the Japanese currency as a safe-haven currency when there are risk aversions. 

The British Pound (GBP)  

The British Pound is the currency of UK and is the fourth most traded currency internationally. The GBP is heavily traded against euro and the US dollar but has less presence against other currencies. 17% of all transactions are done through GBP in global forex market.  The fundamental factors that affect the pound are as complex as the British economy and its influence. This currency is usually the alternative to euro especially when EU problems get too messy.

The Swiss Franc (CHF)  

The Swiss Franc is the currency of Switzerland. The most popular exchange rate is the CHF/ERU pair. This is the only currency of a major European country that does not belong to EU nor G-7 countriesDespite the size of the Swiss economy which is relatively small, the Swiss franc is one of the four major currencies traded in the forex market. The CHF is also a safe-haven currency and investors move towards it during periods of risk aversion. The CHF prices depend on the central bank policy. The CHF tends to be more volatile compared to other major currencies due to lack of liquidity. 

The Canadian Dollar (CAD) 

The Canadian Dollar is a commodity driven currency. The main product of the Canadian economy is crude oil. With this, the prices are influenced by the price of crude oil. Global economic growth and technological progress help make CAD attractive to investors. 

Don’t forget to follow and subscribe for more updates about market trends, analysis, forex news, strategies and more!  

  

Do you want to learn more about forex trading? Sign up now on our FREE forex webinar and reserve your FREE seats while it still lasts!  

 

Risk Disclaimer:  

Learn to Trade Pty Ltd (ACN:138178542, AFSL:339557) provides general information and educational courses and materials only. This is not an offer to buy/sell financial products. We do not provide personal advice nor do we consider the needs, objectives or circumstances of any individual.  Financial products are complex and all entail risk of loss. Over-the-counter derivative and foreign exchange products are considered speculative because they are highly leveraged and carry risk of loss beyond your initial investment, hence should only be traded with capital you can afford to lose. Please ensure you obtain professional advice to ensure trading or investing in any financial products is suitable for your circumstances, and ensure you obtain, read and understand any applicable offer document 

 

The information contained herein (“Content”) has been prepared and issued by Learn to Trade Pty Ltd (LTT), and all intellectual property relating to the Content vests with LTT unless otherwise noted. The Content is provided on an as is basis, without warranty (express or implied). Whilst the Content has been prepared with all reasonable care from sources we believe to be reliable, no responsibility or liability shall be accepted by LTT for any errors or omissions or misstatements howsoever caused. No guarantees or warranties regarding accuracy, completeness or fitness for purpose are provided by LTT, and under no circumstances will any of LTT, its officers, representatives, associates or agents be liable for any loss or damage, whether direct, incidental or consequential, caused by reliance on or use of the Content. 

 

 

You may also like to read:

Please Leave a Comment

Your email address will not be published. Required fields are marked *