The currencies most heavily traded in today’s foreign exchange market roughly mirror the international trading activities of the countries involved.
For example, the most actively traded currencies in the forex market consist of the U.S. Dollar, the European Union’s Euro, the Japanese Yen, the British Pound Sterling, the Swiss Franc, the Australian Dollar, the Canadian Dollar and the New Zealand Dollar.
The current foreign exchange market is clearly dominated by the U.S. Dollar, which currently makes up over 80% of transactions on the world exchange.
The most actively traded currency pair in the forex market consists of the Euro against the U.S. Dollar or EURUSD currency pair. This pair alone accounts for roughly 28% of the global forex market trading activity on an average day. See a free live chart of the EURUSD here.
The second most actively traded currency pair is the U.S. Dollar against the Japanese Yen or USDJPY, and the third most actively traded currency pair is the U.K. Pound Sterling against U.S. Dollars or GBPUSD, also known as Cable
The symbols assigned to the different currencies consist of three letter codes called ISO 4217 codes that are assigned by the International Organization of Standards.
The first two letters in the code generally consist of the ISO 3166 country code (also sometimes known as the Internet country code), while the last letter is the first letter of the currency. For example, the U.K. Pound Sterling is GB which is the ISO 3166 country code for Great Britain and P which stands for Pound.
What follows in the table below are the countries, currency names, three letter codes and traditional symbols for the major and minor currencies:
- European Union Euro EUR €
- United States Dollar USD $
- United Kingdom Pound Sterling GBP £
- Japanese Yen JPY ¥
- Switzerland Swiss Franc CHF Sfr.
- Australia Australian Dollar AUD A$
- New Zealand New Zealand Dollar NZD NZ$
- Canada Canadian Dollar CAD C$
Many other countries exist in the world, and most of them have their own currencies. Outside of the major and minor currencies is the large group of the so-called “exotic currencies”.
Exotic currencies are made up of the hundreds of currencies not in the major or minor leagues, but which are nevertheless important as well, especially in international commerce and finance.
The exotics include:
RUB – the Russian Ruble
CNY – the Chinese Yuan or Remnimbi
BRL – the Brazilian Real
MXN – the Mexican Peso
CLP – the Chilean Peso
INR – the Indian Rupee
IRR – the Iranian Rial
These make up just a few of the most actively traded exotic currencies. In some cases, a country will use U.S. Dollars as their currency, such as countries like Haiti for example.
The Chinese Yuan
One exotic currency which is seldom seen traded in the forex market is the Chinese Yuan or Remnimbi. The reason for this is that the Yuan is pegged to the U.S. Dollar, and the exchange rate that the Chinese maintain by intervening in the forex market is currently set at 8.277 Yuan to the Dollar.
What this means is that whenever the U.S. Dollar moves, the Chinese Yuan moves with it. In other words, if the Dollar goes up against the Euro, the Yuan will go up against the Euro by roughly the same amount in percentage terms.
At present, the Yuan is being artificially kept low relative to the U.S. Dollar by the Chinese. This benefits Chinese industry since it keeps wages in China artificially low in U.S. Dollar terms, thereby making goods produced in China highly competitive on the global market.