Top 8 Major Currencies for Trading Forex

Currency trading is becoming more popular due to large potential of fast and great gains and an extensive number of investors. It plays an important role in financial system of a country because it offers its investors with exclusive and profitable investing opportunities. Currency trading is done for almost all the foreign currencies but some currencies have more demand and considered as major currencies for trading. It is crucial for every trader and investor to be well aware of trading values of different currencies. A brief description about top eight trading currencies is given here.

U.S. Dollar:

The U.S. dollar is considered as a standard that deals against other foremost currencies like euro, Japanese yen and British pound. Many countries hold their foreign reserves in the US dollar because it is an international currency and its downward trend might be slow. The dollar is supported by economic essentials such as gross domestic product, manufacturing and employment reports. It is generally influenced by the central bank and interest rate policy.

European Euro:

The euro has tendency to be a slower currency as compared to its colleagues like the British pound or Australian dollar against U.S.dollar. It’s often used in pair trades with the dollar.

Japanese Yen:

The Japanese yen have tendency to deal under the identity of a carry trade component. This is a volatile currency for trade against higher-yielding currencies like the New Zealand and Australian dollars and the British pound because of low interest rate.

British Pound:

The pound deals the foreign exchange markets around the world but the value of pound sterling fluctuates relative to other currencies. It is used as a reserve currency around the world and possessed third rank in amount held as reserves due to the stability of the British economy, government, high interest rates and increase in value against many currencies e.g. Dollar, euro and yen.

Swiss Franc:

The Swiss franc is the official currency of Switzerland and Liechtenstein. It is denoted CHF which stands for the Confoederatio Helvetica franc. Swiss Franc is used by the Central Bank of Switzerland. It is relatively stable to the Euro but volatile against the U.S. dollar.

Canadian Dollar:

It is the currency of Canada, normally abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies. It is divided into 100 cents. Many central banks and commercial banks keep Canadian dollars as a reserve currency and considered as a benchmark currency. . However its value depends upon the trading value of crude oil because Canada is a major exporter of the product of crude oil.

New Zealand Dollar:

It is the currency of New Zealand and written as NZ$ to distinguish it from other dollar-denominated currencies and known as Kiwi. It is divided into 100 cents. It is one of the 12 most popular traded currencies and strongly affected by currency trading.

South African Rand:

It is the currency of South Africa denoted by "R".One Rand can be divided into 100 cents. The Rand is one of the most volatile currencies of the world. It is a favorite currency for the carry-trades where investors borrow money in countries with low interest rates to invest in markets with elevated profits.