Currencies that are widely accepted and used in international trade and finance are generally considered to be tradeable.
The most tradeable currencies tend to have a relatively stable value and a relatively liquid market, making them a good choice for investors and traders who are looking to gain exposure to different currencies.
1. US Dollar
With nearly 88 per cent of all currency dealings taking place in the US dollar (USD), it is the most traded currency globally. It is extensively utilised as a reserve currency by central banks around the world and is the official currency of the United States. The size and stability of the US economy are two major factors in the USD’s standing as the most traded currency in the world. The largest economy in the world and one that is regarded as being generally stable is the United States, which has contributed to the USD’s status as a safe haven currency. This implies that during periods of economic uncertainty or volatility, investors frequently swarm to the USD.
2. Euro
The Euro (EUR) is the official currency of the European Union and is used by 19 of its 27 member countries, collectively known as the Eurozone. It is the second most traded currency in the world, and it is widely used in international trade and finance. The Euro was introduced in 1999 as an electronic currency and began circulating as physical currency in 2002. The idea behind the Euro was to create a single currency for the European Union in order to promote economic integration and stability, and to make it easier for people and businesses to trade across borders within the EU.
3. Japanese Yen
The third-most traded currency in the world is the Japanese Yen (JPY), which serves as the country of Japan’s legal tender. In international trade and finance, particularly in the Asian region, it is widely employed. The Japanese Yen has a lengthy history and has been accepted as payment in Japan for many years. The complex system of coins and notes that had been in use since the Edo era was replaced by the contemporary version of the Yen, which was adopted in 1871.
4. British Pound
The British Pound (GBP), which serves as the official unit of account for the United Kingdom, is the fourth-most traded currency in the world. It has a long history as a significant currency and is frequently used in international trade and finance. The British pound has been used as the official currency of the UK since the 18th century, but its origins date back to the eighth century. The Bank of England, the central bank of the UK, oversees the creation and circulation of the pound and formulates monetary policy to support price stability and long-term economic expansion.
5. Australian Dollar
Particularly in the Asia-Pacific area, the Australian Dollar is widely utilised in international trade and banking. The first Australian banknotes were printed in 1910, giving the Australian Dollar a long history. In 1966, the Australian Pound was replaced with the contemporary Australian Dollar. The Reserve Bank of Australia, the nation’s central bank, manages the issue and circulation of the AUD and establishes monetary policy to support price stability and long-term economic growth.
6. Canadian Dollar
The official currency of Canada is the Canadian Dollar (CAD), which ranks as the sixth most traded currency worldwide. In international trade and banking, particularly in the North American region, it is widely utilized. The loon, a bird that is shown on the one-dollar coin, is the source of the nickname “Loonie” for the Canadian dollar. Its exchange rate is based on supply and demand in the foreign exchange market because it is a floating currency. The Bank of Canada oversees the creation and circulation of the Canadian dollar and establishes monetary policy to support stable prices and long-term economic expansion.
7. Swiss Franc
The seventh most traded currency worldwide is the Swiss Franc (CHF), which serves as Switzerland’s official unit of exchange. In international trade and finance, particularly in the European region, it is widely employed. Since the 18th century, Switzerland has utilised the Swiss Franc as its official form of money. After Switzerland embraced the gold standard in 1850, the current Franc was first issued.
8. Chinese Renminbi
China’s national currency is the Chinese Renminbi (CNY), also referred to as the Chinese Yuan. It is currently the ninth most traded currency in the world, and usage has grown recently as trade ties with China have become more significant and China’s economy has continued to expand. The Renminbi has a lengthy history and has been used as money in China for a very long time. After the People’s Republic of China was established in 1949, the current Renminbi was introduced. The Renminbi is issued and administered by the People’s Bank of China (PBOC), the nation’s central bank.
9. Hong Kong Dollar
The official currency of Hong Kong is the Hong Kong Dollar (HKD), whose exchange rate is tied to that of USD. In order to maintain this fixed exchange rate, the Hong Kong Monetary Authority intervenes in the foreign exchange market. This implies that the value of the HKD is tightly correlated with the value of the US dollar. The Hong Kong dollar is utilised extensively in worldwide trade and banking as a result of the peg, notably in the Asian region. The HKD is a popular currency for both regional investments and cross-border trade.
10. New Zealand Dollar
The New Zealand dollar (NZD) ranks as the 10th most traded currency globally. Particularly in the Asia-Pacific area, it is widely utilised in international trade and banking. The export of goods, particularly those from the agriculture sector, such as dairy and meat products, is a substantial source of income for New Zealand. As a result, the NZD’s value is tightly correlated with the costs of these goods, which makes it susceptible to changes in the world’s commodity prices.
