Currencies To Trade In Foreign Exchange
Foreign exchange market basically deals with the buying and selling of different countries of the world. As we all know there are various types of official currencies that are used all over the world. But there are only few currencies of the world which are actively traded in the foreign exchange market. In forex market only the most economically/politically stable and liquid currencies are demanded in sufficient quantities. There are some few major currencies to trade in foreign exchange market. Because of the size and strength of the United States economy, the American dollar is the world's most actively traded currency. Let’s discover the few currencies to trade in online foreign exchange market in this article.
There are generally eight major currencies traded in foreign exchange market. These frequently traded currencies in foreign exchange market include US Dollar (USD), Euro (EUR), Japanese Yen (JPY), British Pound (GBP), Swiss Franc (CHF), Canadian Dollar (CAD), New Zealand Dollar (NZD) and Australian Dollar (AUD). These are however the major currencies to trade in foreign exchange online. Currencies in foreign exchange market are always quoted in pairs. However, the first currency in any currency pair is called as the base currency while the second currency is referred to as quote currency.
From the eight major currencies, mathematically we can derive twenty seven different currency pairs. Amongst these currency pairs, there are about eighteen currency pairs that are conventionally quoted by foreign exchange market makers as a result of their overall liquidity. These pairs include USD/CAD, EUR/USD, USD/CHF, GBP/USD, NZD/USD, AUD/USD, USD/JPY, EUR/CAD, EUR/AUD, EUR/JPY, EUR/CHF, EUR/GBP, AUD/CAD, GBP/CHF, GBP/JPY, CHF/JPY, AUD/JPY and AUD/NZD. These are the currencies to trade in foreign exchange market. Yet these pairs are however the most liquid and are the major currency pairs that are commonly traded in foreign exchange market.
The above eighteen currency pairs represent the majority of the trading volume in the foreign exchange market. This wieldy number of choices makes currency trading a lot less complicated as compare to other trades. So, be sure to get familiar with the major currencies to trade in online foreign exchange market before you start trading currencies.