Forex Major Currencies

Major currencies

Major currencies such as the US dollar, Euro, UK Pound and Japanese Yen are the most liquid among currencies. These currencies are widely held by banks as reserves creating a high demand and a stable rate. Brokers in the foreign exchange market offers the most liquid currencies in a way to prevent wide spreads and wild price fluctuations displayed by less stable currencies. Some professional currency traders do speculate on minor currencies to take advantage of a potential spike in value however, their weight in comparison with the majors are irrelevant that their central banks have little control to stabilize their value in an event of a currency crisis thus, registering volatility higher than the currency majors.

The US dollar is the most traded currency in the Forex market followed by the Euro, British pound and the Japanese Yen. Currencies reflect their respective country's economic status. However, since currencies are freely traded, the present value of a certain currency doesn't necessarily reflect a country's real economic condition. In most cases, a currency's price movement is mainly fueled by speculations driving its value to premature levels that contributes directly to trade imbalances.

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