Although money is basically traded in the Forex trading market, no physical commodities are traded and this can lead to some confusions.
When you buy a stock of a certain company, you are buying part of that company. In the same way, when you purchase a certain currency, you are buying a share of the currency’s country. If you buy US dollar, you are buying a share of the United States. If their economy is doing well, your investment grows, and when you sell that “piece of economy” back to the market, you have made a profit.
In this view the price of the currency reflects what the market thinks of the present and future health of the country’s economy.
Major Currencies Traded
The US Dollar is the most traded currency, being on one side or the other of 86.3% of all transactions. The Euro’s share is second at 37%, while that of the Japanese yen is at 16.5%.
Symbol and its Country Currency:
- USD – United States Dollar
- EUR – Euro members Euro
- JPY – Japan Yen
- GBP – Great Britain Pound
- CHF – Switzerland Franc
- AUD – Australia Dollar
- CAD – Canada Dollar
- NZD – New Zealand Dollar
Currency symbols always have three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country’s currency. For example take USD. The US stands for United States and the D for dollar, as in United States Dollar.
The currencies stated above are called Majors because they are the most common currencies being traded.