A Look at the Best Currency Pairs to Trade – Introduction
Every day, traders from around the world exchange more than $5.3 trillion in currencies. An year ago, this number was about $5.6 trillion. Even with the decline, it is still the world’s largest industry by volumes.
Technology and competition have played a part in making this industry vibrant. In the past, the field of forex trading was a reserve to the big banks like Goldman Sachs and Morgan Stanley. These are the people who could afford the technology and the fees to exchange the currencies.
Today, with all areas having access to technology, the industry has seen exponential growth. People from rich countries like the United States and those from poor countries like Zimbabwe are participating in this trade.
To become a successful currencies trader, you need to understand the dynamics about these currencies. You need to understand their economies and the factors that affect their movements. Obviously, this means that some currency pairs are difficult to trade because most traders don’t focus on them. So, here are the best currency pairs you should try.
This is the most traded currency pair in the world. Traders love the pair because of the available news, its activeness, and its liquidity. For example, in most days, traders receive data from either the EU or the EU countries and from the United States. By having all this data, they can make solid decisions on how to enter or leave the trades.
This is the pair between the Great Britain Pound and the dollar. The pair is the second mostly traded currency in the world. Traders love it because of its liquidity and the access to financial news. Like the US, Britain regularly releases regular economic data, which is very important in helping traders make decisions on entry or exit from trades. The pair is commonly known as the cable.
This is a pair between the Euro and the pound. The relationship between Europe and the EU is about to get interesting because of the Brexit effects. Nonetheless, the two will remain related and committed because of the historical trade ties that exist between the two. Because of the regular flow of information from these two, you should give the pair a try.
Canada is the third most important trading partner of the United States. The two countries share a border and are the most successful North American countries. Every day, trade worth tens of billions of dollars cross the border of the two countries. In addition, Canada is one of the most endowed countries in terms of natural resources. A combination of all these factors make the pair one of the most liquid in the world.
This is a pair made between the dollar and the South African rand. South Africa is the largest economy in Africa. In the past, the country has seen major mismanagement by the current president, Jacob Zuma. Early this year, the party nominated Cyril Ramaphosa to become the party chairman. He is a successful entrepreneur who founded a company called Shanduka. He is also seen as being incorruptible. Therefore, in the next few months, this pair will be a bit volatile which is a good thing for traders.
Australia is one of the most blessed countries in the world in terms of resources. The country has vast deposits of gold, silver, copper, and diamonds. Like the other currencies I have mentioned, Australia regularly publishes financial news and data which makes the pair very interesting to traders.
As a trader, you should avoid currencies of countries like Poland, Finland, and Norway because of the difficulty of finding the news about their countries.