1- US dollar (USD)
The US dollar is the official currency of the United States, and it is issued by the Federal Reserve (Fed). It is the most widely traded currency in the world, with a daily average volume of US$2.9 trillion. 1
Its popularity can be attributed to a number of factors. To begin with, the United States is the world's largest economy and a global commercial superpower. Second, the US dollar is the world's primary'reserve currency,' kept by central and commercial banks for international transactions and investment, accounting for about 63 percent of total currency reserves. 3 Finally, many commodities, such as gold, oil, and copper, are valued in dollars.
While the dollar's value is primarily driven by US economic performance and commodity demand, it can also be affected by fluctuations in the economic performance of other countries that utilise the dollar — either officially or de facto. Ecuador, Panama, and El Salvador are just a few of these countries.
2- Euro (EUR)
The euro is the European Union's (EU) official currency and the world's second most traded currency, with a daily average volume of about US$1.1 trillion.
1 The European Central Bank issues it (ECB).
The euro's appeal stems mostly from the size and economic influence of the eurozone, in which it is employed. This now includes 19 of the EU's 28 members, but the remaining nations — with the exception of the United Kingdom and Denmark – are obligated to join in time under the Maastricht criteria. It is also the world's second-largest reserve currency, accounting for around 20% of global reserves in terms of volume. 3
The euro's value is heavily influenced by the bloc's political and economic developments. ECB meeting announcements, GDP releases, job data, national and EU-wide elections, and other events on our economic calendar all have the potential to have an impact.
3- Japanese yen (JPY)
The Japanese yen is the country's national currency and the world's third most traded currency, with a daily average volume of $554 billion.
1 It is also the world's third-largest reserve currency, accounting for roughly 4.9 percent of global currency reserves.
3 The Bank of Japan is the issuer (BoJ).
The value of the yen is strongly reliant on the health of Japan's economy, particularly its industrial sector, which produces vital exports such as automobiles, electronics, machine tools, ships, and textiles. Many forex traders pay attention to economic announcements since the value of the yen often rises in tandem with demand for these products. The announcement of the BoJ meeting, GDP data, the index of industrial production, the Tankan survey, and unemployment figures are all examples.
Because China is a major competitor in manufactured goods, the strength of the Chinese yuan can have an impact. A weak yuan can make Chinese exports more competitive on the global market, lowering demand for Japanese goods and, as a result, the yen. Finally, it's worth remembering that the price of oil can have a significant impact on the yen's value. This is because Japan is a large oil importer, and rising prices can have a significant impact on the country's economy.
4- The pound sterling (GBP)
The pound sterling is the official currency of the United Kingdom and its overseas territories, and it is also the fourth most traded currency in the world, with a daily average volume of approximately US$422 billion.
1 It is also the world's fourth largest reserve currency, accounting for 4.5 percent of worldwide reserves in terms of value. 3
The value of the pound is heavily influenced by the UK's economic performance, with data on inflation, the Bank of England's (BoE) monetary policy, GDP, and employment reports all having an impact. Its value has been influenced in recent years by the UK's changing relationship with Europe: on June 23, 2016, the country opted to leave the EU in a referendum. The date for Brexit is presently set for March 29, 2019, and the nature of the country's ultimate relationship with the EU – particularly its future commercial relationship – is expected to have an impact on the pound in the years ahead.
5- Australian dollar (AUD)
The Australian dollar is the Commonwealth of Australia's official currency and the world's fifth most traded currency, with a daily average volume of US$223 billion.
1 The currency is the world's sixth most widely held reserve currency, accounting for 1.8 percent of worldwide reserves in terms of value.
3 The Reserve Bank of Australia issues it (RBA).
Commodity prices and the 'terms of trade' - the ratio between the prices of Australia's imports and exports – have a significant impact on the Australian dollar's value. Australia is a large exporter of coal, iron, and copper, among other mined commodities, and a big importer of oil, therefore changes in these commodities' trade volumes and prices might affect the AUD.
The currency's value is also influenced by the amount of the country's foreign obligations, with a rise in this area likely to result in a drop in the value of the Australian dollar against the currencies of major trading partners.
Furthermore, any interest rate differential between the RBA and other central banks can have an impact, since money is more likely to flow into countries with higher interest rates and away from nations with lower interest rates.
6- Canadian dollar (CAD)
The Canadian dollar is the country's national currency and the world's sixth most traded currency, with a daily average volume of US$166 billion.
1 The currency is the fifth most widely held reserve currency in terms of value, accounting for 2.02% of worldwide reserves.
Canada, like Australia, is rich in natural resources and a significant commodity exporter, therefore commodity prices can have a big role in deciding the value of the CAD. If commodity prices rise, the currency will likely grow in value, but if they decline, the currency will likely fall in value.
The United States is Canada's most important commercial partner, accounting for more than 75% of all exports and 50% of all imports.
4 As a result, changes in US economic performance and the value of the US dollar have a particularly strong impact on Canada's economy and currency. Interest rate differentials between the two countries can also influence the value of the currency, with the currency appreciating versus the dollar if the BoC's rates are higher than the Fed's, and vice versa.
7- Swiss franc (CHF)
The Swiss franc is Switzerland's official currency and the world's seventh most traded currency, with a daily average volume of US$164 billion.
1 It's also the eighth most popular reserve currency, accounting for 0.18 percent of worldwide reserves in terms of value. The Swiss National Bank issues it (SNB).
The Swiss franc has become a'safe-haven' currency due to the country's reputation for financial services and banking secrecy, as well as reasonably sound monetary policies and low debt levels. As a result, during times of global economic uncertainty, it tends to climb as money rushes into the country.
However, because the eurozone buys about half of Swiss exports, the currency's value is also heavily influenced by the strength of the euro and the economic success of countries in the region.
8- Chinese renminbi (CNH)
The Chinese renminbi, also known as the 'yuan,' is the official currency of the People's Republic of China and the eighth most traded currency in the world, with a daily average volume of US$142 billion.
1 Despite the fact that it is an emerging market currency, it is the seventh most widely held reserve currency, accounting for 1.23 percent of world reserves. The People's Bank of China issues it (PBoC).
The renminbi was tied to the US dollar for many years. The PBoC, on the other hand, recently eased its monetary policy to enable it to float within a limited band versus a basket of major currencies, ostensibly in preparation for allowing it to float freely in the future. Many economists, however, believe that China has benefited from a weak yuan, which has made its exports more competitive and allowed it to sustain a trade surplus with many other nations during the last few decades, and are sceptical of its claims to be aiming for a free-floating renminbi.
Because China is a large exporter of commodities and manufactured goods, the renminbi's value is heavily influenced by the country's trade terms, especially with major trading partners such as the United States and Europe. As a result, Trump's trade war, as well as its effects on US-China ties and global trade in general, might have a significant impact on the renminbi in the months and years ahead.
9- Hong Kong dollar (HKD)
The Hong Kong Monetary Authority (HKMA) issues HKD$10 notes, while three authorised banks - The Hongkong and Shanghai Banking Corporation (HSBC), Standard Chartered Bank, and Bank of China – issue all other denominations. Its exchange rate is set at roughly HK$7.80 to US$1, and the three approved banks are required to deposit dollars with the HKMA when issuing bank notes in order to maintain this level.
Between April 2016 and April 2019, HKD turnover more than doubled, propelling the currency from 13th to ninth place in the worldwide rankings. The surge in trading volume is most likely due to the uncertainty surrounding Hong Kong's political situation, which has exacerbated the volatility of HKD pairs and provided profit chances.
10- New Zealand dollar (NZD)
The New Zealand dollar is the country's national currency and the world's tenth most traded currency, with a daily average volume of US$68 billion. It is not a major reserve currency, like the krona. The Reserve Bank of New Zealand issues it.
The value of the New Zealand dollar is heavily influenced by the country's trading connections, the value of its imports and exports, and the strength of its trading partners' currencies. China and Australia are two of New Zealand's most important trading partners. Agricultural products, particularly dairy and meat products, are its key exports, while oil, machinery, and automobiles are its main imports.
The Reserve Bank of New Zealand's monetary policies, notably the interest rates issued and how they compare to those offered by other banks across the world, can have an impact. When interest rates are relatively high compared to those offered in other nations, the currency is likely to appreciate, and when they are relatively low, it is likely to depreciate.