Major and Minor Currencies
>> Monday, May 23, 2011
Major and Minor Currencies
Big brokers give investors the opportunity to trade any national currency. Two currencies are always at play in each transaction at the forex. Invest after you’ve done your homework. Currency symbols are made up of three letters. The first two refer to a country name and the last to the name of the currency itself.
The major FOREX currencies are the following: USD (United States, Dollar), EUR (Euro members, Euro), JPY (Japan, Yen), GBP (Great Britain, Pound), CHF (Confederation Helvetica, Franc), CAD (Canada, Dollar), and AUD (Australia, Dollar). A currency trading broker will tell you that “minors” is the designated term for all other currencies.
Foreign exchange rates are gauged as one currency’s price in terms of another currency. But there are other rates to consider, like a country’s interest rates. Broadly speaking, one country’s currency gains strength in comparison to other currencies when it (the first country) raises its interest rates and assets get moved to obtain greater returns. However, the effect is felt differently in the stock market, where interest rate hikes cause investors to withdraw their money. Money leaves and weakens the currency but the wise investor must discern if the overall effect on the currency will be one of added or diminished strength.
