What are the Exotic Currencies And How It Affects The Forex Markets

We all know that the forex market has the highest liquidity in the world that reaches two trillion dollars a day

. It is unquestionably a very prosperous market that can be a good source of profit. There are thousands and thousands of forex traders all over the globe who profits in the forex industry. In this business, there are a lot of things to learn in order for you to profit real good and maintain it. In the following, you will know what are the most tradable currencies and the least tradable.

It is important to know these currencies so that you will know what to trade. The top five currencies traded every single day are the U.S. dollar (USD), the British pound (GBP), the Japanese yen (JPY), the European euro (EUR) and the Swiss franc (CHF). These currencies popularity in the forex market is more than 70% in North America alone. The minor currencies in the forex industry are the Australian dollar, the Canadian dollar and the New Zealand dollar. They can all be consider as exotic currencies. Exotic currencies are the currencies with little liquidity and have limited dealing duration. It can be a major or minor currency.

The forex industry has played a big role in many financial institutes and banks worldwide. Hence, it is a very profitable source. Due to this source many countries are depending to one another because of the increase of the foreign exchange trading. The economic status of a country can oscillate the rate of the currency they are using. Be aware that the value of their currency can simply change base on their economy. So, it can easily go up or down.

Recently, the there has been three currency who have maintain their slots in the most traded currency. Those are the Japanese yen (JPY), U.S dollars (USD) and European Euro (EUR. Let us discuss the following and figure out why they have been the most in demand currencies.

Who doesn't know the U.S dollar (USD)? This is the most popular currency by name since the states that use it as their official currency are well-known and consider being wealthy countries. Though, for the past 2 decades it has continuously decreasing its value. Still, it maintains to be on top of the list of the most tradable currencies. This simply states that the countries that use it are strong and fighting to become prosperous as they are before.

Unlike the U.S dollar (USD) the Japanese yen (JPY) is now continuously making their way to the top in today's forex market. Japan has shown its effort in developing their country for many years now since the WWII. Their economic status has been great and that is why their currency is now in the top 3 list of the major currencies. All they hard work has paid of for they are now one of the strongest countries.

Lastly, the European Euro has a very nice strategy in attaining its position in the forex market. There are no reasons why it won't belong to the top 3. It is backed up by eleven wealthy countries in Europe namely: France, Spain, Belgium, Italy, Portugal, Austria, Finland, Luxembourg, Ireland, the Netherlands and Germany. These nations are consisting of approximately 300 million people that accounts for about 20% of the world's economy. In addition, the European Union is the largest foreign market. It is twice as big as Japan's and Canada's forex market combined.

What are the Exotic Currencies And How It Affects The Forex Markets

By: YC Ng

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