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The world's most famous currency

The world's most famous currency
The world's most famous currency

The world's most famous currency

It is the financial instrument that is used in a specific country in order to complete the buying and selling process, and there is a group of currencies that are classified as one of the most famous global currencies, due to their important economic impact, and widespread use in many countries of the world, and among the most famous currencies global is the following:

U.S. dollar

The US dollar is one of the most famous global currencies, if not the most famous among them all, as the US dollar has the lion's share of its trading volume among various other currencies, and one of the reasons for the large trading volume of the US dollar is that it is the currency of the United States of America, which has the strongest economy In the world, the average trading volume in US dollars is approximately $2.2 trillion per day.

euro

Despite the relative recentness of the euro, it is one of the most prominent and famous global currencies, especially in the continent of Europe. The euro currency is classified as the second currency in terms of circulation among various countries of the world after the US dollar, and the euro currency is the second largest currency in terms of global reserves. The euro currency is traded between most of the eurozone countries.

Japanese Yen

The Japanese yen is one of the world's most traded currencies in Asia, and a large part of the strength of the Japanese economy is attributed to it. The interest between two currencies.

Sterling pound

This currency is also called the Great British Pound, and the pound sterling is ranked fourth as the most traded global currency in the forex market, and despite the presence of Britain within the European Union, it does not adopt the euro as the official currency of the country, and one of the reasons for this is that Britain is proud of the pound sterling as a historical currency in Britain, As well as the role of the pound sterling in maintaining domestic interest rates.

Canadian dollar

The currency used in Canada is the Canadian dollar, and one of the most prominent features of this currency is that it is the main currency in the world specialized in commodities, as it is directly affected by and affects the commodity markets, including precious metals and crude oil.

Swiss franc

The Swiss franc is a neutral currency that is widely used in the forex market, as it is considered to many traders in this market as a safe haven for them, and the Swiss National Bank plays an active role in maintaining the Swiss franc currency by actively entering the forex market in order to ensure That the Swiss Franc be traded within a relatively limited framework to avoid volatility and to maintain interest rates.

Types of currencies in the world

There are many types of currencies in the world, including what is circulated among the local population in countries that contain a currency specific to that country, and some are outside the framework of the monetary currency circulated among the general public, and the following are the types of currencies in the world:
  • Paper currency: It is the one that is used in a material way directly in the buying and selling operations and to cover various economic works, and it is issued by governments within a specific legal framework.
  • Currency-backed assets: These are currencies that are made from some types of precious metals in order to guarantee the value of the currency, and these assets can also be exchanged for a specified amount of paper currency.
  • Commodity-backed currency: It is one of the currencies that were used in the past, and the principle of its existence is based on the existence of specific goods used to guarantee the value of the currency, and this commodity-backed currency has contributed to the rise of capitalism.
  • Digital currencies: are those smart currencies that are traded through the Internet so that these currencies do not have a physical presence on the ground, and one of the most prominent examples of digital currencies is Bitcoin.

Factors affecting the currency exchange rate

There are a number of different factors that affect the exchange rates of the most famous international currencies against each other so that the value of one of these currencies declines against the growth of the value of the currency it corresponds to, and the following are the most important factors that affect the exchange rate of the most famous international currencies in global markets:
  • Inflation difference: In the normal situation, the increase in the value of the currency is linked to the decrease in inflation rates in a country, due to the increase in its purchasing power against other currencies.
  • Interest rate difference: The increase or decrease in interest rates is directly reflected on the investment side of the countries, as the interest rate leads to attracting foreign capital, which contributes to the high exchange rate of the currency.
  • Existence of a deficit in the current account: The current account reflects the value of payments for goods and services, dividends and interest from business operations, and the presence of a deficit in the current account means that there is spending more than earning, which leads to a decrease in the exchange rate in the country.
  • Public Debt Ratio: Public debt in countries is formed by the presence of many projects that need external or government financing, and the increase in public debt leads to a decrease in the number of foreign investors in the country, which increases inflation and affects the exchange rate.
  • Trade terms: through the effect of trade terms on trade movement, current accounts and budgets for payments in different countries, where currency exchange rates increase by increasing the demand for exports according to trade terms.
  • The strength of the economy: The economic strength of the state is one of the most important reasons that help to stabilize the exchange rate, as countries with a strong economy have the ability to face economic crises, which causes more investment polarization, and raises the exchange rate of the currency.

Currency exchange markets

There are special markets in which different types of currencies are bought and sold, and buying and selling currencies around the world is a form of trade, as currency rates do not remain fixed against each other, as there occurs from time to time an increase or decrease in the value of the most famous global currencies according to a set of economic conditions and factors that affect currency exchange rates around the world.

The foreign exchange market is a global network for online trading, as it is not specific to a specific physical site, but rather is present on the Web around the clock, while the forex market is the largest financial market and the most liquid market around the world, with a daily trading volume of approximately 6.6 trillion American dollars.
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