Exotic currencies are those that are thinly traded in foreign exchange markets and are not commonly used in global financial transactions. These currencies typically come from developing or emerging market countries and are characterized by low trading volumes, high volatility, and a lack of liquidity. Understanding Exotic Currencies An exotic currency refers to a currency […]
A cross currency refers to a currency pair or transaction that does not involve the U.S. dollar. In a cross currency transaction, the U.S. dollar is not used as a contract settlement currency. A cross currency pair consists of two currencies traded in the forex market that do not include the U.S. dollar. Common examples […]
The major pairs in forex (FX) trading are the four most heavily traded currency pairs in the global market. These pairs are: – EUR/USD (Euro/US Dollar) – USD/JPY (US Dollar/Japanese Yen) – GBP/USD (British Pound/US Dollar) – USD/CHF (US Dollar/Swiss Franc) These major currency pairs are all deliverable currencies and are part of the Group […]
The base currency is the first currency listed in a currency pair, such as USD/EUR, where the U.S. dollar (USD) is the base currency. The second currency in the pair is known as the quote or counter currency. If you are “long” on the currency pair, you are betting that the base currency will increase […]
A pip in forex trading is the smallest whole unit price move that an exchange rate can make, based on market convention. It is commonly understood as one-hundredth of 1% (0.0001) and is reflected in the fourth decimal place of most currency pairs. For example, in the USD/CAD currency pair, a pip is equivalent to […]