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Forex currencies & pairs
- 1. Currencies & Pairs Joel Kruger, FX Trader joel@jkonfx.com @JoelKruger
- 2. Currency Codes 3 Letter ISO Country Code (International Organization for Standardization) First 2 letters are the country code Third is currency’s first letter* *There are some exceptions
- 3. USD = US Dollar GBP = GB Pound JPY = JP Yen
- 4. MXN = MX Peso (New) RUB = RU RuBle EUR = EU EuRo
- 5. Anatomy of Currency Pairs Relative value of currencies Base value vs. Quote value Base is always 1 unit Quote value varies
- 6. Major Pairs
- 7. Most Active Currencies US Dollar (USD) Australian Dollar (AUD) Canadian Dollar (CAD) Euro (EUR) Japanese Yen (JPY) British Pound (GBP) Swiss Franc (CHF)
- 8. How Often 86%Involve USD 37%Involve EUR 15%Involve GBP 17%Involve JPY 7%Involve CHF
- 9. Active Pairs EUR/USD USD/JPY GBP/USD AUD/USD USD/CHF NZD/USD USD/CAD 85%of total FX Market $4TnEach day gets exchanged
- 10. Higher Volumes Higher Liquidity Low Spreads
- 12. Minor Pairs
- 13. Less liquidity/volume Higher spreads More Volatility
- 14. Minor Pairs EUR/GBP EUR/CHR CHF/JPY EUR/NZD CAD/JPY GBP/JPY AUD/JPY EUR/AUDEUR/CAD EUR/JPY NZD/JPY GBP/CHF GBP/CADGBP/AUD
- 15. Exotic Pairs
- 16. Exotic Currencies Mexican Peso (MXN) Indian Rupee (INR) Singapore Dollar (SGD) + Lots more… Russia Federation Ruble (RUB) South African Rand (ZAR) South Korean Won (KRW) Hong Kong Dollar (HKD)
- 17. Exotic Pairs USD/ZAR USD/MXN USD/RUB USD/TRY USD/INR USD/BRL SmallLeast traded out of all LotsHundreds of them
- 18. Exotic Pairs Notice how the majority cross with USD? Not all Exotic Pairs cross with USD though.
- 19. Common Nicknames Pair Name AUD/USD Aussie EUR/GBP Chunnel EUR/JPY Yuppy EUR/USD Fiber GBP/JPY Gopher/Guppy GBP/USD Cable NZD/USD Kiwi USD/CAD Loonie/The Funds USD/CHF Swissy USD/JPY Yen USD/RUB Barney EUR/RUB Betty
- 20. Lot Sizes Yard = 1,000,000,000 Buck = 1,000,000 Standard = 100,000 Mini = 10,000 Micro = 1,000
- 22. Cryptocurrencies Two important ones Bitcoin (XBT/USD) Litecoin (LTC/USD)
- 23. Thank you! Joel Kruger, FX Trader joel@jkonfx.com @JoelKruger
Editor's Notes
- Having the currency appended to the end helps to reduce the possible collision of names. The word “dollar” is used in many countries, i.e. US Dollar, Australian Dollar, New Zealand Dollar, Singapore Dollar
- There are some exceptions to the rules though so it is always best to check if you are unsure. If a newer version of the currency is brought out for a country and it is re-valued, then “N” may be used instead. The Russian Ruble used to be RUR but was renamed to RUB The Euro is an outlier with the first three letters as the currency ISO code.
- Lots of currencies have nicknames.
- USD is by far the most popular currency to cross. EUR is second most popular. JPY and GBP are very closely matched. CHF is always seen as a safe haven currency which is why it is very popular.
- The currency market is constantly growing. $4Tn USD is exchanged each day. All of these pairs account for approximately 85% of daily trades.
- Many minors cross with USD
- There are lots of minor currencies which are traded on a daily basis.
- Lots of currencies have other names too.
- Prefix “X” to the metal’s periodic symbol. There is also Palladium (XPD) which can be bought against the USD.
- Bitcoin has had a lot of press over the past 24 months. It has gone from trading less than $2 to $1,242 per coin. It has since retraced and looking to gain more stability. Litecoin follows off the back of Bitcoin, it is worth considerably less and currently easier to mine.