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Currencies U.S. Dollar

Banks, financial institutions, and corporations no longer have a monopoly on foreign currency trading thanks to digital advances. Now, individual investors can access the foreign exchange market (Forex) too. There are 180 legal currencies that can be traded on Forex, but 95% of currency trade relates to these most popular currencies.

By using information technology platforms between global banks to conduct foreign currency trading, the foreign exchange market (FX or forex) is a decentralized global market where all the world’s currency trading is conducted over a variety of platforms and exchanges.

The advent of internet trading software has propelled the industry to allow instantly tradeable currency which has caused the number of daily transaction volumes to increase dramatically. This has led the Forex market to be extremely liquid and more stable.

As the largest trade market in the world, trading on the foreign exchange market occurs the European, Asian and United States trading sessions. While overlap does occur between the three sessions, the majority of each currency that is traded occurs during their session.

An exchange rate is based on the value of a country’s currency in relation to another country’s currency. With currency rates determined by how much demand there is against the supply of a currency, the increase or decrease of a country’s currency can fluctuate based on interest rates, unemployment numbers, inflation, gross domestic product output, manufacturing date, and commodities.

U.S. Dollar

The U.S. dollar is the most used currency for global transactions. It is one of the world’s reserve currencies as well as a standard unit of currency for various commodity markets such as precious metals or energies.

Yen

Yen is the official currency of Japan. It is the third-most traded currency on the foreign exchange market and a highly used reserve currency after the U.S. dollar, euro, and pound sterling.

Pound Sterling

The pound sterling is the official currency of the UK as well as the world’s oldest existing currency. With one of the highest rates in the world, the pound is the fourth-leading trade currency on Forex.

Euro

The Euro is the official currency of 19 European Union countries. It is managed by the European Central Bank and the second most widely held foreign exchange reserve of central banks.

Canadian Dollar

The official currency of Canada, the Canadian dollar is the seventh-most popularly traded currency on Forex. This currency accounts for 2% of all global reserves.

Aussie Dollar

The Aussie dollar is the official currency of Australia. Sometimes, it’s regarded as a commodity currency because it’s associated with Australia’s extensive raw material exports. These exports cause the currency to experience its rate fluctuations.

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