Online Currency Trading ...
Below are some of the Major Currencies that are traded online:
The U.S. Dollar - is without a doubt the world's primary currency. All currencies are generally quoted in U.S. dollar terms. Under conditions of international economic and political unrest, the U.S. dollar is the main safe-haven currency which was proven particularly well during the past SE Asia financial crisis.
The U.S. dollar became the leading currency toward the end of the Second World War and was at the center of the Bretton Woods Accord, as the other currencies were virtually pegged against it. The introduction of the euro in 1999 reduced the dollar's importance only marginally.
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The Euro was designed to become the #1-currency for trading by simply being quoted in American terms. Like the U.S. dollar, the euro has a strong international presence stemming from members of the European Monetary Union. The currency remains plagued by unequal growth, high unemployment, and government resistance to structural changes. The pair was also weighed in the past decade by outflows from foreign investors, particularly Japanese, who were forced to liquidate their losing investments in euro- denominated assets. Moreover, European money managers re balanced their portfolios and reduced their euro exposure as their needs for hedging currency risk in Europe declined.
The Japanese Yen is one if one of the most popular foreign exchange markets in the world; it sometimes trades in a diverse trend vs othe currencies but has a much smaller international presence vs the U.S. dollar or euro. The yen is very liquid around the world, basically 24X7. The natural demand to trade the yen is concentrated mostly among the Japanese keiretsu, the economic and financial conglomerates.
The yen is much more sensitive to the fortunes of the Nikkei index, the Japanese stock market, and the real estate market. The attempt of the Bank of Japan to deflate the double bubble in these two markets had a negative effect on the Japanese yen, although the impact was short-lived.
The British Pound - Until the end of World War II, the pound was the currency of reference. Its nickname, cable, is derived from the telex machine, which was used to trade it in its heyday. The currency is heavily traded against the euro and the U.S. dollar, but has a spotty presence against other currencies. The two-year bout with the Exchange Rate Mechanism, has at times had a soothing effect on the British pound, as it generally had to follow the deutsche mark's fluctuations, but the crisis conditions that precipitated the pound's withdrawal from the ERM had a psychological effect on the currency.
Prior to the introduction of the euro, both the pound benefited from any doubts about the currency convergence. After the introduction of the euro, Bank of England is attempting to bring the high U.K. rates closer to the lower rates in the euro zone. The British pound could join eventually.
The Swiss Franc - is the only currency of a major European country that belongs neither to the European Monetary Union nor to the G-7 countries. Although the Swiss economy is relatively small, the Swiss franc is one of the four major currencies, closely resembling the strength and quality of the Swiss economy and finance. Switzerland has a very close economic relationship with Germany, and thus to the euro zone. Therefore, in terms of political uncertainty in the East, the Swiss franc is favored generally over the euro.
Typically, it is believed the Swiss franc is a stable currency. Actually, from a foreign exchange point of view, the Swiss franc closely resembles the patterns of the Euro, but lacks good liquidity. As the demand for it exceeds supply, the Swiss franc can be more volatile vs the Euro currency market.