Exchanging a bit of money when you go on vacation is one thing, but trading large sums of international currency is a totally different story. The two do have one thing in common though – they are traded on the Foreign Exchange Market.
It’s not smart to change one dollar (or any type of currency) for something else until you know the exchange rate. This is especially true if you’re dealing with someone else’s money or trading thousands at a time. It can sound like a lot to handle, which is why most people begin their trading experience with the most traded currencies.
These tend to be a bit more stable, and more sought-after currencies. Stability helps new traders wrap their mind around how the international money market works, and the popularity of the currencies means there’s always business available.
Here’s a closer look at the most tradable currencies.
1. The U.S. Dollar.
The U.S Dollar is the worlds reserve currency and as such the most popular currency around the world. You will notice the most traded pairs are all crosses of the USD.
EUR/USD, GBP/USD, USD/JPY, USD/CHF, USDCAd
2. The Euro
The second most popular form of currency in the world is the euro. Many professional Forex traders and avid travelers alike often joke between the relationship of the euro and the dollar. It’s a well-known rivalry that is always giving one side or the other the upper hand.
It might be beneficial to sell dollars for euros one day, and the next, the better deal is the other way around. Keep a close eye on these rates.
3. The Pound
Many people make the mistake of assuming they can use Euros in England since it’s part of the European continent. However, England has always had its own currency and ever since Brexit, this is even more important to keep in mind.
Still, the English pound is one of the most powerful currencies in the world. It’s worth getting your hands on it when you can then selling when the exchange rates are the most beneficial.
4. The Yen
Here’s a top currency that might come as a surprise: the Japanese Yen.
It’s actually the third most-traded currency in the world, but it’s better to set a clear difference between the euro and the pound, then jump into the Asian market. In fact, many traders use the rise and fall of the yen as an indicator of the strength of Asian currencies as a whole.
5. The Franc
Next on the list is the Franc, the Swiss form of currency. This is basically considered the “safe bet” in the Forex market. The franc tends to have a neutral relationship with the global currency exchange as a whole, offering some stability while other currencies are rising and falling round the clock.
6. The Canadian Dollar
Last but not least, the Canadian Dollar, also known as the loonie. The rise and fall of its value in the world market usually follows the behavior of Canada’s main exports and imports.
Keep an eye on the economic movements and natural or political events that may cause drastic changes, and you’ll be able to understand the Canadian dollar very well.
Start Working with the Most Traded Currencies
As interesting as it may be to read about the most traded currencies, it’s even more exciting to start trading them yourself. Whether you’ve always had an interest in the world market or you have no clue how it all works, you’ve come to the right place to learn how it all works.
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