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Top 5 Most Traded Currencies in the World

Forex is an abbreviation for Foreign Exchange. It is the transaction of exchanging one currency for another. It can be performed for a variety of reasons, including commercial, tourism, and to enable international trade. The Forex market accounts for an average of $6.6 trillion worth of trades daily; hence it is one of the biggest markets in the world.

Forex Trading is prevalent and is a liquid market. Foreign currencies are traded on the forex market, open to buy and sell coins 24 hours a day, five days a week. It is used by banks, businesses, investment firms, hedge funds, and retail traders.

Here we will learn about the top five most traded currencies in the world. They are:

1. The United States Dollar

The USD (United States Dollar) tops the list of most traded currencies. It is issued by the Federal Reserve (Fed). It is the official currency of the United States. It accounts for a daily average volume of US$2.9 trillion in Forex Trading.

2. The European Euro

The Euro is the second most traded currency in the Forex Trading Market. It is the official currency of the European Union (EU). It accounts for a daily average volume of nearly US$1.1 trillion. It is issued by the European Central Bank (ECB).

3. The Japanese Yen

The Japanese Yen is the third most traded currency in the Forex Trading Market. It is the official currency of Japan. It accounts for a daily average of US$554 billion. It is the third most prominent reserve currency in the world, estimated to be around 4.9% of the global currency reserve. It is issued by the Bank of Japan (BoJ).

4. The Pound Sterling

The Pound Sterling is the fourth most traded currency in the Forex Trading Market. It is the official currency of the United Kingdom. It accounts for an average daily volume of US$422 billion. It is the fourth biggest currency reserve in the world which is estimated to be about 4.5% of global funds by value. It is issued by the Bank of England (BoE).

5. The Australian Dollar

The AUD (Australian Dollar) ranks fifth among the most traded currencies in the world in the Forex Trading Market. It is the official currency of the Commonwealth of Australia. It accounts for a daily average volume of US$223 billion. It is the sixth most commonly held reserve currency in the world, with an estimation of about 1.8% of global reserves by value. It is issued by the Reserve Bank of Australia (RBA).
Conclusion.

The trading of the above currencies in the Forex Trading Market depends on many factors like economic crisis, price hikes, export, etc. There can be frequent fluctuations noticed in the numbers of the trading volumes. But, when compared with all the currencies in the world, the above five currencies form the base of the Forex Trading Market. The above five currencies contribute to 90% of trade in the Forex Markets.

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