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December 04, 2019
Depending on the economic situation, investors choose where to invest their money and what currency to buy. The best forex broker is here to help you pick the right currencies to trade. Not everyone knows that there are a large number of currency pairs that can be traded. Many traders, especially beginners, only trade major currency pairs such as EUR / USD, GBP / USD, USD / JPY.
But, have you ever thought about other opportunities that will allow you to make more money? In this article, we will tell you about the major currencies. You will learn to use each currency pair in different situations to increase your income.
Safe-haven is a place that is safe from loss or danger. There are currency pairs that can protect you from financial danger. Safe-haven or a safe currency pair is a currency that can strengthen when the market is unstable and frightened in a market where investors need a safe place for their investment.
What are these currency pairs? Safe-haven currencies exist in countries with stable political and economic situations, low inflation rates and payment of surplus balances. Over time, various currencies play a role as a safe currency. At the moment the safe currencies are the US dollar, the Japanese yen, and the Swiss franc.
The U.S. dollar has played a major role since the Bretton Woods conference in 1945. Over the past ten years, more than 60% of the country's foreign exchange reserves have been controlled by the US dollar.
All things being equal, investors also see the US dollar as a safe and reliable currency. Positive news about the growth of the American economy and the labor market also helped maintain the exchange rate of this currency.
The Japanese Yen is another currency that is favored by investors. This is interesting because the yen could have strengthened despite negative news from Japan. This happens because Japanese investors bring money from outside Japan back to the Japanese domestic market (called repatriation).
Cross-currency pairs such as AUD / JPY, NZD / JPY, CAD / JPY are the most traded and negative news on the commodity market can increase the yen and the result makes other currency pairs go down in exchange rates.
The Swiss franc is a safe currency because of Swiss political neutrality and an attractive banking sector. During the 2010-2012 Eurozone debt crisis, demand for francs was high. In conclusion, we can say if more reserve currency pairs are used when the economic situation is unstable and investors want to protect their savings.
In conclusion, we can say if this reserve currency pair is used more when the economic situation is unstable and investors want to protect their savings. We are sure you know that commodities are the main thing used in trade. If you remember this definition, it will not be difficult for you to determine the country with the commodity currency.
Commodity currencies are economic currencies with a large share in the production and export of natural resources such as oil, gas, coal, precious metals, etc. Canadian, Australian, and New Zealand dollars, Russian rubles and Norwegian krone are examples. However, most commodity currencies are regulated by the government and are not widely traded on the market.
In short, when traders want to trade commodity currencies, they must follow price trends in the commodity market. There are a large number of currency pairs including commodity currencies and safe currencies. This currency pair has large profit potential, and you can find out all about it with the best forex broker, which is Salma Market's forex broker.
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