Most Traded Currencies in the World

The 5 Most Traded Currencies

The top 5 most traded currencies in the world are the U.S. Dollar, the Euro, Japanese Yen, Great British Pound and the Australian Dollar. Aside from only knowing that, knowing why and how they correlate to the richest currencies will give you a better understanding of their economic structure.

A better understanding of their economic structure will result in a better understanding and better analysis of the foreign exchange markets. Ultimately, these currencies play a significant role in the forex market due to their high levels of volatility. By now, we are all aware that more volatility equals more risk and profit potential.

1. U.S. Dollar (USD)

The USD stands at the top of this list because many other countries use the U.S. Dollar as their primary currency. Couple that with the fact that America is the center for major cross-border transactions and we have the most diverse culture. In case you don’t know what cross-border transactions are, they are when two or more countries agree to “exchange.” If Mexico decides to purchase barrels of oil they must first convert their Peso (MXN) to U.S. Dollars (USD) before placing this purchase. In Forex, this would result in a significant spike on the (USDMXN) exotic currency pair.

Many countries use the USD for cross-border transactions.

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Posted by on February 23, 2016
D'Vaughn Bell