U.S. Dollar and major Currencies in forex trading
1) The U.S. Dollar.
Economy of the United States is biggest of the world. So that US dollar is dominated all over the forex market. United states dollar is an universal assess to evaluate any other currency traded on currency market. Every currencies are usually quoted in U.S. dollar terms. Many countries have international economic and political unrest but under any condition United States can maintain a better economic condition. So that US dollar is a safe-haven currency. The southeast asian nations faced economic crisis during 1997-1998 but US dollar was stable. As it was indicate d, the U.S. dollar became the top currency toward the end of the Second World War along the Breton Woods Accord, as the other currencies were virtually pegged against it. Euro, which was introduced in 1999 decreased the dollar’s importance only slightly.
The other major currencies traded against the U.S. dollar are the euro, Japanese yen, British pound, and Swiss franc.
The other major currencies traded against the U.S. dollar are the euro, Japanese yen, British pound, and Swiss franc.
2) The Japanese Yen.
Japanese yen secured third position in forex traded currency. In terms of international presence Japanese has smaller than U.S Dollar or Euro. Around the glob Japanese yen is very liquid practically around the clock. The natural demand to trade the yen concentrated mostly among the Japanese keiretsu, the economic and financial conglomerates. The Nikkei index, Japanese stock market and the real estate market are catalyst of Japanese yen.
3) The British Pound.
The currency of reference was pound till end of World War II. The currency is heavily traded against the euro and the U.S. dollar, but has a spotty presence against other currencies. Prior to the introduction of the euro, both the pound benefited from any doubts about the currency convergence. After the introduction of the euro, Bank of England is attempting to bring the high U.K. rates closer to the lower rates in the euro zone. At present British pound is a major traded currency in forex market.
4) The Swiss Franc.
The Swiss Franc is not include in European Monetary Union and G-7 countries. Relatively swiss economy is small but its currency is well traded in forex market. Both Switzerland and Germany have close economic relationship. If there are any political uncertainty in the east Swiss franc is favored generally over the euro.
