By: Sara Patterson
With so many countries involved in the money market, it is obvious that you are going to be dealing with a lot of currencies. But with foreign exchange, the art comes in knowing which currencies are more active and which are not.
What’s the deal, you may ask? In foreign exchange, you don’t want to be left with a currency that has little or no interest and which may get stuck with you as you will be having difficulty selling the currency. And most of all, if you have your hands on the active currencies, there is a narrower spread between bids and ask price which would make it easier for you to gain profit.
There are seven currencies that are making it big in foreign exchange trading. These are the United States Dollar, the Euro, the Japanese Yen, the British Pound, the Swiss Franc, the Canadian Dollar, and Australian Dollar. Among the seven currencies, the United States Dollar is the most traded currency. This is followed by the Euro and the Japanese Yen. These three currencies are commonly labeled the globe’s three major economic powerhouses.
The increased activity of these currencies owes a lot to the performance of the country itself, economy-wise. The United States is known for its export powerhouse and is the leading exporter of products in the world. The Euro is a combination of a number of strong economic nations in Europe. Japan has a technological advantage all over the world. These are the very reasons that make their currency among the top three.