Currency Pairs: Part 2

High-Risk Currencies

These are the currencies which have a high-interest rate and high deficit (trade or budget) value. Some of the most common high-risk currencies are Currencies of Baltic nations, Romanian Leu or Turkey. These currencies appreciate or depreciate according to the economic conditions of the world. At the time of boom, there is an appreciation as the developed countries direct the capital to their assets while at the time of recession, the currencies depreciate as the reverse happens.

Exporter Currencies

Exporter currencies are of the nations like China, Japan, and Singapore as these countries keep on fattening their forex reserves due to their exports. The value of the currencies of these countries is directly proportional to the economic conditions of the world. This is because they are exporters and their dependence is on the foreigners. However, these countries can better withstand the impact of any economic instability due to their vast forex reserves.

Closing Thoughts

For a beginner, this may sound a little vague as for why am I supposed to know all this if I just have to do currency trading? I can pick any currency, check the graphs and move on with the trading. But this is not the fact; to become a successful trader, you must be aware of all the basics as even a minor data that looks vague has a significant impact on the profit. There are many things that a trader should learn like evaluating an available data, tools to use for trading and reading a complicated information, etc. Well, all this will be discussed in the next chapter.

Chapter 8….Advantages of Fundamental and Technical Analysis in the Forex Market: Part 1…..>>>

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