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europe 700x391 - 2 Big Events that Affected the Currency Exchange Rates

2 Big Events that Affected the Currency Exchange Rates

While currencies are constructs created by man, the fact is that real situations and events have the power to affect the currency’s exchange rates at any given moment.

Let’s take a historical look at several big events that affected the currency exchange rates of several countries.

Brexit

brexit - 2 Big Events that Affected the Currency Exchange Rates

The first event we’ll be looking at is how the Brexit affected the Pound. When the Brexit vote went through, most of the population was stunned. Naturally, people though about what this would mean for the economies around the globe.

As many predicted, the British Pound currency value did go down. It actually dropped by 12 percent, with more people believing that more was to come.

However, the Brexit also taught us another thing. The British state is actually in good standings with countries that have strong and stable economies and currencies. As such, this allowed them to stabilize pretty quickly and stop any more bleeding.

This taught us that sometimes, it is about who you know. Traders should look at the relationships of countries and how it would affect the currency rates.

United States’ Sanctions Against Iran

usa - 2 Big Events that Affected the Currency Exchange Rates

Eight years ago, in 2012, the United States set sanctions against Iran and affected their currency. The United States had an ultimatum: you could continue working with Iran’s central bank and sever ties with the United States, or just stop working Iran banks altogether.

The thing about this was the central bank of Iran was the same bank that was taking care of all the oil exports to the world. On the other hand, the United States had one of the strongest currencies and economies.

People were confused as what to do at the moment, but sure enough, there was a decline of 60 percent in just a week’s time for Iran. What did we learn here? Perhaps to plan your actions well when United States is in the picture.

These are only a few historical events that effected currency exchange rates. We hope that these have taught you the importance of looking at current events for what affects currencies.

us dollar 700x391 - 2 of the Most Traded Currencies Today

2 of the Most Traded Currencies Today

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.

japan yen - 2 of the Most Traded Currencies Today

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.

dollar - 2 of the Most Traded Currencies Today

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.