- Date : 02/09/2021
- Read: 3 mins
Find out which are the top 6 most traded currencies of the world and the reason for their popularity.
There’s no doubt that the US dollar is the most traded currency in the world. Still, there are some other currencies with which it is traded extensively, and these currency pairs make up a significant percentage of the total forex trading in the world. In this article, you will read about the top six most traded currencies across the globe in volume terms.
Most traded currencies
1. US dollar (USD)
According to a report, the average volume of the US dollar traded in a day was around USD 2.9 trillion. This exceptional popularity of this currency can be attributed to the fact that the US is the world’s largest economy. Furthermore, the US dollar is the most held reserve currency across multiple banks globally for making international transactions. Another reason is that crucial commodities like gold, crude oil, copper etc. are quoted in US dollars.
2. Euro (EUR)
In second place is the euro, the official currency of the European Union. According to a study, it is the second most traded currency in the world after the US dollar. Around USD 1.1 trillion of this currency is traded daily on average. The strong economic scenario and robust political environment in Europe keep the value of the euro stable and high.
Related: History of Indian currency
3. Japanese Yen (JPY)
Next up is the Japanese yen, which is highly traded across the globe. The USD/JPY currecny pair is also one of the most traded. It is the official currency of Japan and the third-largest reserve currency globally. Its value is high due to the country’s flourishing manufacturing sector. Japan is a small country with exceptional development, and the value of its currency remains strong.
4. Pound sterling (GBP)
The pound sterling is the official currency of the United Kingdom and its territories. According to a report, it is the fourth most traded currency in the world. The daily volume of trading of this currency is around USD 422 billion. The reason behind the popularity of the GBP is the UK’s excellent economic performance, high employment levels, and significant monetary policies.
5. Australian dollar (AUD)
In fifth position is the Australian dollar, whose daily currency trading volume is around USD 223 billion. One of the most important reasons influencing the value of the AUD is the well-developed foreign trade scenario of this country. Australia is a top exporter of coal, copper, iron and other mined commodities, so the value of its currency naturally stays strong.
6. Canadian dollar (CAD)
Coming sixth is the Canadian dollar, which is the official currency of Canada. Its daily average trading volume is around USD 166 billion. Canada is a country replete with natural resources. It is also one of the leading exporters of commodities, which influences the value of its currency to a great extent.
The forex market is one of the biggest in the world, with daily volumes touching USD 6.6 trillion since 2020, and it is only increasing. The currencies mentioned above make up the bulk of this volume.