Forex Currencies in 2022 Explained

Forex Currencies in 2022 Explained

Forex is a market of trading fiat currency pairs, which includes stuff like dollar, euro, pound, yen, yuan and so forth. You exchange one currency for another at a current rate to invest into one of them or just speculate on the exchange rate difference (like arbitrage) to gain profit.

For a beginner, there are plenty of options to choose from. Not only can you trade various currencies, but there are also countless combinations of currencies. If you want to sell USD, you can sell it for EUR, GBP, CHF or a variety of other types of money, depending on the current situation in these economies.

The choice of the currency are the choice of the Forex broker are aligned, don’t forget about that. The main choosing factor a broker for a Forex trader is whether or not it supports MT4, and it’s the best Forex trading platform for now. But you should also consider the choice of the currencies themselves. You can see a proper comparison on topbrokers.com.

Table of Contents

USD

American dollar is by far the most popular and influential Forex product. Statistically, over 80% of Forex trades include USD in one way or another. This is obvious, and because of it most Forex beginners simply learn whatever there is to learn about dollar trades.

Besides the fact that it is the go-to currency, the 2022’s USD has several important advantages. Namely, it’s much more stable because of the American economy’s self-reliance and size. You can always just keep some value in dollar savings just to use them for something one day – it’s immensely convenient (at least, for now).

EUR

Euro is the second most-popular currency. The EUR/USD pair in particular is the most traded out of all, making up a quarter of all Forex trades. Short-term speculation is currently the most promising way of gaining money – namely, because of the unstable nature of euro in the current economic situation.

The long-term investments aren’t very reasonable at the moment, although they were for a long time a good alternative to dollar in terms of just storing and multiplying value. Now, they are good for precise investments over days or even hours, and that means the popularity of this currency hasn’t diminished at all.

JPY

Because of its connection to the dollar, the Japanese yen has long been a valuable type of money. What’s more, it also experienced more fluctuations historically, making it more suitable for short-term speculations. USD/JPY is currently the second most-popular pair, and the value of yen in this relationship has actually been climbing steadily the past year.

GBP

The pound has historically diminished from the international currency to the second-biggest to the now-third by volume. USD/GBP accounts for over 11% of all the Forex trades. It’s currently becoming cheaper because of the economic problems Britain is facing, and it even almost crossed a 1:1 threshold in September.

AUD

Australian dollar is the fourth most-popular currency. There have been many different uses for it – primarily as a speculative tool considering the sizeable and constantly fluctuating economy of Australia. At the moment, however, the currency is deteriorating in value and isn’t a very good option for long-term investments.

CAD

Canadian dollar is in many ways similar to its Australian counterpart, and they are barely even different. The latter is just slightly more popular by volume. It’s generally been used for price speculations for neighboring America, although it hasn’t been very effective for this purpose lately – against, because of the shrinking economy.

CHF

Swiss franc is an interesting case. USD/CHF is the sixth most-popular trading pair, but the most curious part of this entire currency is its stability. Its cost in relation to dollar has barely changed in the past 15 years, which makes it an outstanding alternative way to store value.

Forex Currencies in 2022 Explained

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