Other than the value of the currency which our portal has discussed previously, you may even be curious to know which are the most traded or accepted currencies world over. So, here is a quick run through the world's top 5 traded currencies:
Given below is the list of all such heavily traded currencies across the globe. Notably the list is as per the Bank for International Settlements
1. US Dollar (USD):
It is the formal currency of the United States of America (USA) and is the world's topmost traded currency. As per the data, of the total currency trades, the US currency is involved in 87% of the trades.
US dollar is also referred to as greenback and this has a story to it. The currency was created to finance the civil war and its back was printed in green ink and hence ‘greenback'. As per the Bank for International Settlements, the USD has a trading volume of $2.2 trillion on a daily basis.
Also, it is a reserve currency globally i.e. held by global central banks for carrying out both daily transactions as well as for the purpose of investment.
As US Dollar is the currency of US, the economic performance of the country as well as other factor play a part in determining the valuation of the currency.
2. Euro (EUR):
This is the formal currency of the European Union and as many as 19 countries out of 27 EU nations use it. It is also the second biggest reserve currency globally.
Features of the Euro currency:
-The Euro banknotes are same across the Euro zone.
-In respect of the Euro coins one is the national side while the other reverse side is identical for all.
1 Euro: 1.19 US Dollar
3. Japanese Yen (JPY):
This currency issued by Bank of Japan stands on the third spot when it comes to globally top traded currencies. As per the Bank for International Settlements, average daily volume in Japanese Yen is $550 million plus.
In Japanese ‘Yen' implies round or circle and this name given to the currency can be very well related if you imagine the figure of a standard coin.
Similar to dollar, Yen currency is also a safe haven as the Japan economy boast of low interest rates, low debt as well as high trade which imparts stability to Yen.
4. Great British Pound (GBP):
Great British Pound or Pound Sterling is the currency of the United Kingdom. It is the oldest currency that is in continuous use.
As per the Bank of International Settlements, average daily turnover in the currency is $325 million +. The currency GBP is also known and trusted for its stability.
Not to forget, the currency has been impacted hugely by the Brexit vote in 2016 and as at the start of 2021, the value of GBP or Pound sterling has receded almost 15% in comparison to the Euro as against the former's value at the time of the referendum on the UK's membership of the EU in 2016.
5. Australian Dollar (AUD):
The fifth most popular currency in the world is the Australian Dollar. It is issued by the Reserve Bank of Australia functions primarily as the commodity currency. The reason behind is that Australia is into export of coal, iron ore etc.
The value of AUD is primarily derived from an interplay of several factors such as commodity prices, purchasing power parity, government credit ratings, sentiment and speculation and interest rate differentials.
Now why we have collated such an information, this can be important for someone who trades in currency and considering this he or she can then lower their risk by trading in more liquid currency. So, probably for optimal and smooth trade you can go for trading in currency pairs that specify the listed currencies.