- Efficiently trade tax: You will be able to understand how best to make profits from a spread bet because you will not be required to make payments on taxes. At the same time, you will appreciate how benefits from the Contract of difference (CFD) can get offset against any losses incurred for tax purposes.
- Use leverage to magnify your exposure: You can easily open a trading position by paying a small deposit, referred to as a margin.
- Speculate on the movements of prices in both directions: You will know when to go long or when to go short without the need to take ownership of the primary currencies.
For beginners in forex trading, it is essential to open a demo account to familiarise yourself with the trading environment while practising in a risk-free environment.
This guide gives you a better chance to understand the fundamentals of trade currency sets and how best to do your analysis. Below is the forex currency list of the ten most traded currencies in the world.
1. US Dollar USD
The US dollar is the United States’ official currency issued by the Federal Reserve. It ranks as the number one most traded currency in the whole world with a daily trading average volume of approximately US $2.9 trillion.
It is ultimately the most valuable currency in the world. The USA is the largest economy and international trade’s powerhouse, is one of the primary factors why the Dollar is quite popular.
It gets also categorized as the global primary reserve currency primarily for investments and international transactions. In estimates, the currency constitutes about 63% of currency reserves in terms of volume.
The Dollar gets significantly influenced by the demand for commodities and the country’s economic performance. Such factors as the fluctuations in the production of other states using the Dollar economically.
2. Euro EUR
It is the European Union’s official currency issued by the European Central Bank (ECB) and accounts for approximately €1 trillion in daily average trading volume.
The primary factor that makes the euro the second most traded currency in the world is the economic clout of the region the currency used, popularly known as Eurozone.
It comes second as the reserve currency globally just below the US dollar, accounting for only about 20% of the reserve by volume. Some of the influencing factors to the currency’s strength are but not limited to the economic and politic developments within the Eurozone.
However, some other underlying factors that can affect the performance of the euro are the GDP releases, EU-wide and national wide elections, economic calendar and ECB meeting announcements, among other things.
3. Japanese yen JPY
Japan’s official currency and it ranks third as one of the most traded currencies in the world. The yen accounts for about US$554 billion in terms of the daily average trading volume.
At the same time, it also ranks third as the world’s that largest reserve currency with roughly 4.9% of the world’s currency reserves. The Japanese yen is issued and distributed by the Bank of Japan (BoJ).
This currency’s strength dramatically depends on the power of the economy of Japan, especially the booming manufacturing sector. The country’s manufacturing sector is globally known for its critical exports, including machine tools, motor vehicles, textiles, ships, and electronics.
That is the reason why several forex players pay their attention to any economic releases because the value of the yen goes up with any apparent demand increase of these products.
Such information can get obtained from GDP data, unemployment numbers, BoJ meeting announcements, among others. Since China’s currency, the renminbi, is a crucial competitor to Japan in terms of manufactured products, the strength of the yen will depend on just how stable the renminbi is comparatively.
What does this mean?
When the Chinese renminbi is weak, the country exports competitively more to the international markets, which in turn reduces the demand for Japanese products.
4. The pound sterling GBP
5. Australian Dollar AUD
The Australian Dollar marks the Commonwealth of Australia’s official currency. In the list of the prominent currency of the world, it falls in the fifth position with an average trading volume by day being roughly US$223 billion.
6. Canadian Dollar CAD
Canada’s official currency gets issued by the Bank of Canada (BoC). It comes at the sixth place in the most traded currencies ranking for 2019.
7. Swiss Franc CHF
Switzerland’s official currency gets issued by the Swiss National Bank (SNB). It is the seventh most traded currency in the world, and it accounts for a daily average trading volume of approximately US$164 billion.
8. Chinese Renmimbi CNH
The Chinese renminbi is also colloquially referred to as the ‘yuan’. It is the People’s Republic of China’s official currency, and it gets issued by the People’s Bank of China (PBoC).
9. Hong Kong Dollar HKD
This Hong Kong’s official currency and it is issued by the Hong Kong Monetary Authority (HKMA). It is the 9th of the most traded currencies in the world.
10. New Zealand dollar NZD
This is New Zealand’s official currency that is issued by the Reserve Bank of New Zealand. It ranks as the 10th most traded currency in the world with approximately US$65 billion in daily average trading volume.
Some of the most traded currencies set you should know
- USD/EUR: This is the most traded currency pair. This is probably because, among the modern Forex brokers, the pair has the lowest spread.It is also not a very volatile pair, meaning that if you are don’t want to take huge risks while Trading, this is possibly the best pair to pick for that. You can place your bet with little doubt in your mind.
There is also a lot of information everywhere that is easily accessible on how best to trade with this pair. Beginners will likely benefit from this because any rookie mistakes they make will not have great repercussions.
- USD/GBP: The popularity of this pair can be majorly attributed to the possible large jumps and profitable pips. However, if you have to make higher profits with this pair, you have to take greater risks.Greater risks give greater returns thus classified under the category of volatile currencies. Even though it is highly volatile, there is a lot of market analysis available to help traders while trading.
- USD/JPY: This is yet another popular trading pair that can be regularly seen in forex trading. Traders can easily follow through the trades because they can easily follow a smooth trend unlike other currency sets, attributed to low spreads.If well-calculated, it has the potential of delivering to you very profitable and exciting opportunities in the world of forex trading. According to experts, the pair may not show increased activity in 2020 thus can easily be used as a backup tool when carrying out carry trade.
- USD/CHF: This is ultimately the leader of flat and carries trade. You cannot undertake any flat trades if you have not considered this pair. Shifts rarely occur and if does, it does not last beyond two weeks or so.Most changes the pair experiences are attributed to the dynamics of the USD. It can be very profitable when trading on oscillators, stochastics or breaks. In 2020, there is no great shift that can be expected.
- USD/CAD: This pair displays a smooth pattern because of the close relationship between the two countries. It is important to consider the time zone factor because high volatility and active trades are observed during the American trading session.The pair was steady all through 2019 and it is expected to remain through the first half of 2020. The second half of 2020 may display surprising moves and strong volatility because of the presidential election.
- EUR/GBP: This pair moves in a very strange manner. It shows some sharp rises and falls, support and resistance levels and flat movement.You can rarely see other types of movements with this pair but traders can open rebound and breakout orders with about the same potential of implementation. In 2020, this pair will likely be driven by any piece of news on Brexit.
Top 20 most traded currencies in the world
This is a list of the top 20 highest currencies in the world in no particular order as at the end of 2019.
- Turkish Lira
- Fijian Dollar
- Singapore Dollar
- Brazilian Real
- Israel New Shekel
- Libyan Dinar
- Brunei Dollar
- Cayman Islands Dollar
- Gibraltar Pound
- Kuwait Dinar
- Bahraini Dinar
- Omani Rial
- Jordanian Dinar
- Pound Sterling
- Australian Dollar
- United States Dollar
- Swiss Franc
- New Zealand Dollar
- Canadian Dollar
Here is the list of the lowest currency in the world
Here is a list of ten of the lowest currencies in the world.
- Iranian Rial (-114,000 IRR/USD)
- Venezuelan Sovereign Bolívar (44,498.65 VES/USD)
- Vietnamese Dong (23,187.71 VND/USD)
- Indonesian Rupiah (13,995.73 IDR/USD)
- Sierra Leonean Leone (9,711.13 SLL/USD)
- Uzbek Sum (9,536.16 UZS/USD)
- Guinean Franc (9,515.39 GNF/USD)
- Lao or Laotian Kip (8,849.12 LAK/USD)
- Paraguayan Guarani (6,428.58 PYG/USD)
- Cambodian Riel (4,042.79 KHR/USD)
Some of the popular currency symbols are:
- Euro (EUR) €
- Pound sterling (GBP) £
- US Dollar (USD) $
- Japanese yen (JPY) ¥
Most Traded Currencies – Final Words
Identifying the most traded currencies pair to trade is not a simple task. The best way to do it is through practical experience.
Therefore, it is more advisable to open a demo account first and start trading while continuing to practising in Trading. Once you’re ready, open your EverFX trading account, using a real account and start trading, we are here for you!
Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances or needs.
Risk Warning: Our products are traded on margin and carry a high level of risk and it is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved.