A pair consists of two currencies, represented by two ISO codes plus a separator, such as GBP/USD, where the first code stands for “base currency” and the other for “secondary currency”.
The mainstream currency pairs in the trading market are dominated by the included currency pairs, such as /US dollar (EUR/USD), /US dollar (GBP/USD), /US dollar (AUD/USD) and so on.
The most commonly traded currencies in the most common currency markets are called “major currencies”.
Most currencies are bought and sold against the U.S. dollar (USD).
The U.S. dollar (USD) is the most frequently traded currency.
The next five most-traded currencies are: the euro (EUR);
(JPY);
The pound (GBP);
(CHF) and the Australian dollar (AUD).
The six major currencies account for 90 per cent of the trading volume in the global foreign exchange market.
Exchange rates change rapidly.
Supply and demand in the market determines the value of money, and the value of one currency is represented by another currency.
In a currency pair, the first currency is called the “base currency” and the second currency is called the “denomination currency” or “relative currency”.
When you trade currencies, you buy the base currency and sell the denomination currency.
The exchange rate tells buyers how much it costs to buy a unit of the benchmark currency.
The order of currency pairs is usually unchanged, which is common practice in the industry.
For example, the currency pair USD/JPY(USD is the base currency and JPY is the denomination currency).
The order of the currency pairs you see will not change.
So whether you buy or sell depends on the direction of the trade.
For example: USD/JPY- You can buy JPY with USD or you can buy USD with JPY.
For example: EUR/USD 1.2500 means you need $1.25 to buy one euro.
You can also say that if you sell one euro, you get $1.25.
All transactions involve both buying one currency and selling another.
If the euro exchange rate changes to 1.26 the next day, you will have earned 1 cent for every euro you bought.
If you trade in the opposite direction, you will lose 1 cent on every euro you sold (at 1.25) (because that euro will cost you $1.26 to “buy back”).
Sterling is likely to underperform in the third quarter, dollar index highs are off, and May CPI data is on watch.
Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.
