FT Guide to Foreign Exchange Trading

4

Currencies in brief

There is a wide range of currencies available to trade and this chapter will look at most of the more commonly traded ones. They can be roughly divided into three different types:

The majors – there are really only three major globally traded currencies at the moment, and most FX traders will tend to concentrate on trading these against each other. Indeed, some traders will focus on a single currency pair only, to the exclusion of all else. The majors consist of the US dollar (USD), the euro (EUR) and the Japanese yen (JPY). The USD is the foremost, considered the reserve currency of central banks globally, and underpinning many aspects of the international financial system (e.g. most commodities are priced in US dollars, ...