World Currencies

The FOREX market is dominated by five major currencies:
US Dollar, Euro, Japanese Yen, British Pound and the Swiss Franc. By nature of their popularity and activity these five account for over 70% of North American trading. The other tradable hard currencies include the Canadian, Australian, and New Zealand Dollars, the French Franc. These minor currencies account for 3% - 7% of the total market volume. Together, the five majors and minors constitute all hard currencies that are currently traded on the FOREX market.

US Dollars (USD)
The US Dollar Index gives the relative strength of the Dollar. The Index is a statistical index that reflects the strength or weakness of the trend of the US Dollar. The larger the index figure, the stronger the Dollar, or vise-versa. The weakness of the Dollar over the last two decades is mostly attributable to the world's low opinion of fiscal policies resulting in large budget deficits.

Euro (EUR)
Europe has taken its first irrevocable steps towards what economists call "Euroland" and its single currency - the Euro. The eleven nations are: France, Italy, Spain, Portugal, Belgium, Luxembourg, the Netherlands, Austria, Finland, Ireland and most importantly Germany. The original 11 nations are comprised of approximately 300 million people and account for nearly 20% of the global economy. The European Union represents America's largest foreign market (twice the size of Canada and Japan combined). Trade-flows between the US and Europe have been roughly in balance for a quarter of a century, unlike Asia where the US runs huge trade deficits.

Japanese Yen (JPY)
Japan is an undisputed Global Economic Power in today's marketplace. Japanese products are being consumed all over the world, and Japanese foreign investments are immense. Since the Second World War, Japan has been focusing all its energy and resources in developing its economy. With Unique traditions and management skills, Japan has turned out to be one of the biggest economic powers in the world. The Japanese Yen is the third most traded currency in the world. The Yen is theoretically sensitive to the fortunes of the Nikkei Dow, the Japanese stock market, and the real estate market. The currency is very liquid around the world, practically around the clock.

British Pound Sterling (GBP)
The British economy has been in a downtrend for some years. It has been affected by inflation, high unemployment and union strikes. All of these have a significant impact on the exchange rate of the Pound Sterling. Sterling Pound, nicknamed "cable", has only 14% of the worlds market currently. The currency is heavily traded against the US Dollar and Euro, but has a minimal presence against other currencies. In the recent past, the Pound has behaved like a roller coaster, due to British inflation and labor problems. Whereas excellent in London, the currency's liquidity in the other markets is less deep. Therefore, in the New York market, many banks have to stop quoting this currency at noon. Although not obvious, the British Pound is a petrocurrency. Traders are somewhat more sensitive to trading the Pound as it is sensitive to oil price gyrations.

Swiss Franc (CHF)
Switzerland is the neutral country amidst an area of many different political rivals. It has a prosperous tourism industry and the world's most advanced banking system. During international turmoil or unrest involving non-European countries, the Swiss Franc becomes the second "safe haven" in choice next to the US Dollar. In 1990, the Swiss Franc broke its historically high exchange rate against the US Dollar several times. In 1991, it suffered the most during adjustments periods. The trend in Swiss Franc depends on the political reform in the Eastern Block, international economic stability, and the strength of the US Dollar.

Australian Dollar (AUD)
The currency of the "Land Down Under" is the 6th most-traded currency in the world's foreign exchange markets. The Australian dollar accounts for 4% - 5% of worldwide foreign exchange transactions. Currency traders utilize the Australian dollar in their portfolio due to the limited government intervention in the FOREX market, the general stability of the country and the economy and the fact that it gives exposure to the Asian markets.

Canadian Dollar (CAD)
During the 1970s, the Canadian dollar was more valuable than the USD, but it's never regained that level. For more than a decade, inflation in the Canadian dollar (also known as the "loonie") has been relatively low.