The World’s Biggest Trading Currencies

coverIt will come as no surprise that the most traded currency in the world is the United States Dollar which is closely followed by the Eurozone’s Euro and the Japanese Yen in third place.

The British Pound Sterling is the fourth most traded currency and in fifth place is the Australian Dollar. The Pound Sterling has taken a hammering on the exchange markets lately because of political volatility and confusion surrounding Brexit – Britain’s divorce from the European Union.

Although Britain is not part of the Eurozone which shares the Euro currency, it is very much exposed to Eurozone trading and most of the City of London’s transactions are with other EU institutions such as the European Central Bank and the Bundesbank in Germany. This is something to ponder on, given the recent decision about Brexit.

The Australian Dollar also took a beating due to the collapse of the raw materials industry. Banks were trading robustly because of the boom in Chinese construction which drew on Australia’s mining industry. As China’s economic growth slowed, construction also took a downturn and this led to a strengthening of the Chinese Yuan.

Japan is still struggling with very high inflation and high commodity prices, especially in the capital Tokyo. Prime Minister Shinzo Abe was elected on his ‘Abenomics’ plan to stimulate the Japanese economy and get things moving again, but growth has not gone as anticipated. Japan still has the emerging Asian economies at its disposal and it is still one of the most technologically advanced countries in the world. Exports of digital equipment, smart technology as well as traditional manufacturing such as motor cars have continued to support the economy and keep it trading at a high value.

The EU, wracked with instability and financial problems, continues to struggle. The shared currency is still the second highest trading in the world and still services 19 out of 28 member states with others which are waiting to join. The Eurozone is still registering anaemic growth and Greece is still in a very pitiful state.

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