The Forex is centered around trading currencies. Thus, it is important to understand the exchange rates of each currencies. As much as five trillion dollars is traded every day. And it is this amount that people want to get into and hopefully share in.
Let’s check out several of the most traded currencies today. This will allow traders to see what exact currencies and exchange rates they should look at and focus on.
The Japanese Yen
First of all, we have a surprising entrant in the Japanese Yen. The Japanese Yen is Japan’s central currency. Apart from though, it is also the currency that is the most traded within Asia. As such, this currency acts much like a United States dollar in that it is like a reserve currency.
This distinction elevates it to a high status within the other currencies of the world.
According to financial studies, whenever there is something happening in Western countries, investors move over to invest in the Yen. Another reason why they tend to do so is the fact that Japan is one of the biggest exporters in the world.
As of 2017, the Japanese Yen came in third and constituted to about 21 percent of all money traded.
The United States Dollar
Without much surprise, the United States dollar is part of this list. Without much contest, the dollar is the most traded currency in the world.
There are a number of reasons why this is so. Like the Japanese Yen, it also acts as a sort of currency reserve. However, it is also traded widely due to the fact that it is acknowledged and recognized in many of the countries around the globe.
In terms of exchange rates, the U.S. dollar serves as the benchmark at which all currencies are measured against.
These are only a couple of the most traded currencies in the world. We hope that this will help you identify which currencies you need to watch, as well as the exchange rates that you need to watch out for.