A lot of Forex traders make mistakes after thinking about what you are trading except for its price fluctuations on the screen. While saying that the price is king in the trades, and also that the prices are not so high that you can not go up additional, and not very low so it can not be decreased more, the trading will be better if you have some understanding about what you distinguish currencies deliberating it. Understanding of the major world currencies in the Forex trader will make you a better and more focused and more profitable.
What are the major world currencies in the Forex?
There are eight currencies are considered the most important in the world of Forex. And it is almost arranged in terms of their importance as follows:
US Dollar USD
The euro EUR
Japanese Yen JPY
British Pound GBP
The Canadian dollar CAD
Australian dollar AUD
New Zealand dollar NZD
In addition, the Chinese CNY
become increasingly important, although it is not transferable fully yet. There "internal" and "outside", and the latter is what is offered for trading by many Forex brokers.
Clear categorization above did not simply result in proportion to the gross national economic indicator or any other product. Instead, the importance given to these different currencies take into account the possibility of conversion and use a universal precaution and the correlation of commodities. For example, there are many countries, such as India, which has a much larger economy than Switzerland or Australia. But Australia is an important source of gold and many other commodities, which are used in the industry, while the Swiss banks retain a significant portion of the world's gold and especially the capital, giving the weight of these currencies beyond the national economies they represent. You have to think after Statistics economies in order to succeed in the world's major currencies in the Forex understand.
Currency is a national religion
All contemporary currencies are backed securities is nothing more than a promise by the central bank of the state to respect its commitment. Currency debt is 100%.
The US dollar is king
The first thing that a Forex trader attention to him in the world's major currencies in the Forex understanding is that the US dollar is of prime importance. All other currencies are measured in terms of the beginning of its value against the US dollar. And therefore, you can trade Pfurks more simply by focusing on the seven other currencies against the US dollar rather than worrying about each pair as possible in a way, although there are some exceptions.
The importance of the US dollar is not only because of the sheer size of the American economy, which is larger than any other state, and almost the same size of the entire euro zone. The reason is the distinctive position of the United States being the architect of the global financial system and the world's major power only. The US dollar is the main reserve currency in the world, and there are greater monetary wealth in the US dollar than any other currency.
This means that the US dollar will normally be a major motive for currency movements. If people around the world are interested in having the US dollar, it will rise and tends to reduce the majority of other currencies, and vice versa. During the past 15 years, the US dollar was a pattern of more predictable and stronger than any other major currencies in the Forex markets, and that helps the world's major currencies in the Forex understand.
Currencies "safety" against the currencies of "danger"
For many reasons, the market tends to see these currencies as safe currencies, and thus tend to increase in the relative value when there are disorders market because of fears about the global economic horizon: the US dollar, the Japanese yen and the euro. Swiss franc coin was considered a safe maximum, but this fall because of some big re-evaluation carried out by the Swiss National Bank, and also because of the very high negative interest rate at -0.75%.
Other currencies have a good performance when there is a good global economic growth horizon. The rise in risk sentiment against the move away from the risk is great to help the world's major currencies to understand Forex.
Commodity currencies
Some currencies linked to very positively at the price of various commodities, as these currencies belonging to countries major exporter of these commodities. Main examples are the Canadian dollar, which is linked positively to the price of crude oil, and the Australian dollar, which is linked positively to the price of gold. The Australian dollar tends to perform well when there is a growing demand for dairy and meat products.
Liquidity
The majority of traders noted that the various currency pairs have "personalities" different: Some fickle and moves quickly (a good example is the British pound / Japanese yen) while the other tends to move through a two-step safety and a step backwards (a good example is the euro / US dollar) . The reason is liquidity-linked currencies. There euros and more than any other currency US dollars, and the prices tend to move very slowly. But, when you look at currencies like the British pound and the Japanese yen and the Swiss franc, the amount is much less, and when demand is strong or weak, the liquidity squeeze may result in a price move very fast.