The Five Most Traded Currencies and Reasons for Their Popularity
In this article, the staff at FXEmpire.com discusses the five most traded currencies and the reasons for why they are the most popular.
There are 180 currencies that are currently in active circulation around the globe. Majority of the transactions done in the foreign exchange market are only done with the use of around half a dozen of these currencies. If you are familiar with the Pareto principle, this would make a very good real-world application. In this article, you will be given an overview of the currencies that currently dominate the foreign exchange market.
There following are the five most traded currencies in forex backed up with the reasons for their popularity:
The United States Dollar: There is no doubt about US dollar’s dominance as a currency. Truth be told, this currency does not have any serious kind of competition. This popularity can be attributed to the long-term government stability and the economic dynamism of the United States. It has a very consistent value due to the fact that it is not very much affected by inflation over a long period of time. Many foreign governments are literally holding on to their dollars as their reserve currency mainly because this is the currency used for international transactions. The US dollar, needless to say, is on the pedestal and its status as a currency cannot be paralleled—well, to be precise, not yet.
The Euro: The US dollar as a primary currency definitely needs a second currency.