Forex market is basically a foreign exchange where the currencies are traded. Those who want to be a part of forex exchange one of the first steps is to gain familiarity with some most common and widely traded currencies and their most popular uses in the forex market and in general.
Most Popular Currencies for Trading
Here are the five most traded currencies with detail of each currency given below:
1. US DOLLAR ($ USD)
The U.S. dollar is the first and foremost currency, highly traded currency on this planet. The USD is a world’s currency that is accepted for most international transactions in the world. Because of its global acceptance, this is used by some countries as an official currency. The U.S. dollar also widely accepted in other nations and used as an alternative form of payments
USD is also an important factor in the foreign exchange rate market for other currencies. USD is the most powerful currency as it has around about 585$ billion in U.S Bills that are used outside the country. Most of the domestic products come in the market are priced in U.S dollars. No other currency can replace the USD because it is widely traded in the global market.
2. The Euro
The euro has become the 2nd most traded globally, after the USD. The euro is also the world’s 2nd-Biggest reserve currency. The five largest economies which include Germany, France, Italy, Spain, and the Netherlands use this currency for trading purposes. Their all trading done through European Central Bank (ECB)
Japanese yen (JPY) is the third-largest globally trading currency after USD and Euro. It is the Official currency of Japan. As Japan. The yen’s value depends on the strength of Japan’s economy. It is the third 3rd highest currency reserves. Japan’s key is an exporter of the manufacturing field, particularly in Automobiles and other machines. The yen also has significance in Forex exchange circles due to its role in carrying trade
4. The Great British Pound (GBP)
The Great British Pound, also known as the Pound sterling. It is the 4th most commonly traded currency of Europe in the forex exchange market. It also one of the biggest reserve currency because of its relative value rates in comparison with other global currencies. The United Kingdom is an official member of the European Union. The pound is also an important currency for many other nations for global exchange. Due to its high-value rates, it also acts as a liquid component in the forex exchange market
5. The Canadian Dollar
The Canadian Dollar is the world’s foremost currency probably. Basically, It moves in step with the commodities markets minerals, precious metals crude oil, and gas. Canada is a large exporter of these commodities, mainly crude oil. Many Traders mostly trade Canadian currency to postulates on the movements of commodities.
The United States and Canadian economy both correlated with the strength of U.S Dollar as well as the U.S economy.