Two Major Foreign Exchange Currency
You might be aware that most Forex currencies appear in pair. If USD/EUR is one pair it only indicates that US dollars stand above Euro making it an ideal pair. The first appearing currency is always known as ‘base currency’ and the adjoining one is known as quote currency. There are many currencies involved in Forex market. Some of them are known as majors and few are known as minors.
The major currencies are US dollar, Euro, Japanese Yen, UK Pound, Swiss Franc, Canadian dollar and Australian dollar. The other existing currencies excluding the above are known as minors. US Dollars and European Euros are considered to be major currencies and the most prominent ones.
You need to have a sound knowledge of all the major currencies at the Forex market in order to understand trading. The USD is the principal dominating currency at Forex. During times of disruption and political as well as economical sabbaticals the dollar remained to be intact. The currency that is directly traded against USD is also termed as direct rate and the ones excluding are cross rate.
Euros are just behind the dollars having an equal amount of prominence. It also has not been affected by social, economical and political issues. The reason why these two currencies stand powerful is because of their ability to overcome problems which the others have not overcome. These problems can be high rate of unemployment, recession, political unrest and communal issues. The next currency following them is the JPY which attains the third position when it comes to trading. The most commonly traded pairs are (USD/JPY), (EUR/USD), (USD/CHF) and (GBP/USD). The secret to a successful trading activity depend on your choice of pair. If you focus on two major pair as a beginner, you might soon turn to be an expert in Forex.
More Articles :