![]() ![]() The US dollar (US$) is the most used and trade currency. It is also the world’s most valuable currency, with its strength and value attributed to Kuwait’s oil resources. The Kuwaiti dinar is the world’s strongest and highest valued currency. However, not all the currencies have equal strength or value some are stronger and trade frequently in the foreign exchange markets. Currently, about 180 currencies are used across the globe and recognized by the United Nations. Popular CurrenciesĪlmost every country has a unique currency, although some countries share common currencies. Another form of currency gaining popularity is virtual currency, a digital, unregulated currency issued and controlled by the developer. Fiat money is a currency issued by the government and not pegged on any commodity. Commodity money is money in the form of other items such as gold or silk, which can be used in buying other goods. For instance, a gold certificate representing the value of gold one has. Representative money is money printed on paper representing the value of an item or commodity. Now that you’ve got the scoop on online currency trading, download MT4 platform, open an account at AvaTrade to begin trading your favourite major, minor and exotic currency pairs today. If you’re more interested in cryptocurrencies trading, we invite you to first read our guide on how to trade cryptocurrency.Currencies can be classified into three monetary systems representative, commodity, and fiat money. Examples of exotic currency pairs include the South African Rand (ZAR), the Hong Kong Dollar (HKD) and the Mexican Peso (MXN). Exotic currency pairs are generally illiquid, with wider spreads and fewer market-makers. The reason that they are called exotic currency pairs has nothing to do with the location of the country, but rather the additional challenges involved in trading these currency pairs. Exotic Currency Pair Exotic currency pairs typically include a currency from an emerging market country.Here at AvaTrade, we’ve got a wide selection of minor currency pairs for you to trade. As a general rule, minor currency pairs are any pairs other than the six major currency pairs listed above. They are less liquid than the major currency pairs and they often have wider spreads. Minor Currency Pair Minor pairs, by contrast are those currency pairs that are less traded than the major currency pairs.Their volatility is consequently lower, since – given the large number of traders involved – the consensus on a given price is much stronger and harder to disrupt. Simply put, these are the most actively traded currency pairs in the world, and they offer the greatest liquidity. Major currency pairs include one major currency against the US dollar. These include the GBP/USD, USD/CHF, USD/JPY, USD/CAD, AUD/USD and EUR/USD. Major Currency Pair When you trade currency pairs, you will encounter six major currency pairs in your daily trades.This means that the Euro is stronger than the dollar, or conversely, you would need more dollars to buy euros. If we assume that the EUR/USD is trading at 1.25345, this means that every €1 = $1.25. ![]() Let us further clarify this basic currency trading example by adding in a few figures. In other words, you trade the EUR/USD currency pair – not the EUR or the USD. The ratio is actually viewed as a single unit, even though it refers to 2 individual currencies. In the above currency pair, the EUR is referred to as the base currency, and the USD is referred to as the quote currency. The EUR is the symbol for the Euro, and the USD is the symbol for the US Dollar. Let’s take a simple example to illustrate how this works: the EUR/USD is a commonly traded currency pair. When you’re trading currency pairs, you’re effectively buying one currency and selling the other currency. Estimates peg the value of Forex trading at around $5-$7 trillion per day, a figure that far outstrips the value of all stock market trading in the world. No other market can compare to the sheer value of this massively traded market. Currency trading is the most liquid and robust market in the world. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |