3 Pair Currency That You Must Avoid
Currency in forex
Forex is a currency trading market that is currently world-renowned investment. Many people flock to the world of forex to pit their luck in the world of competition. The way forex works is by buying and selling currencies based on market observations. Therefore, one way for a successful trader is to first know the value of the currency to be bought or sold.
In forex, there are several currencies that are favorites and often circulate actively in large numbers every day. A currency like this has strong value. Usually these currencies are currencies from developed countries that are actively involved in the activities of international banks and world trade. Some of them are USD (US Dollar), EUR (Euro Europe), JPY (Japanese Yen) , GBP (British Stround Pound), CHF (Frans Swiss), NZD (New Zealand Dollar), AUD (Australian Dollar) and CAD ( Canadian Dollar.
Currency pairs in forex
All currencies in forex must be traded in pairs selected based on their liquidity.This is because every forex transaction is done then simultaneously also sell the comparator currency (Base Currency) and buy the base currency (Quote Currency). For example in the EUR / USD currency pair – 1.2274. The base currency is the one on the left (EUR) and the comparison currency is the one on the right (USD).
When you make a transaction you will know how many comparative currencies you have to buy to get 1 base currency from the available exchange rate. So you have to pay 1.2274 USD to get 1 EUR. This is what you call buying a base currency and at the same time selling a comparative currency. Traders will buy a currency pair if it has a prediction that the base currency will strengthen (appreciation) than the comparison currency. Instead the trader will choose to sell the currency pair when it has a prediction if the base currency will weaken (depression) compared to the comparison currency.
There are 18 currency pairs traded in the forex market based on their liquidity values namely USD / CAD, EUR / USD, USD / CHF, GBP / USD, NZD / USD, AUD / USD, USD / JPY, EUR / CAD, EUR / AUD, EUR / JYO, EUR / CHF, EUR / GBP, AUD / CAD, GBP / CHF, GBP / JYP, CHF / JYP, AUD / JYP and AUD / NZD.
The worst currency in forex
In forex, aside from the currency pair, it also has a row of the worst currencies which are mostly avoided in trading. Some of them are:
Bolivar Venezuela – The Venezuelan currency is Bolivar. Bolivar’s exchange rate is very low if it has to be compared with USD . Even the price of 1 Bolivar has been lower than 1 cent USD. At that time even 1 USD could buy 5 gallons of gas in Venezuela. This is caused by chaos and government turmoil that impact on crumbling oil prices, loneliness of foreign tourist visits, and declining exchange rates. The community itself is very difficult to adjust money with income.
Argentine Peso – The next worsening currency is the Argentine Peso. This followed the decision taken by the President of Argentina, Mauricio Macri who decided to relinquish control of the currency and enter floating. This causes the Peso to fall by up to 30% and is increasingly uncontrollable. Another thing that triggered the decline in the Peso exchange rate was also the investment made by the Central Bank of Argentina with the aim of weakening its currency.
Pound Egypt – Egypt is a country that has natural resources such as very heavy crude oil. But who would have thought if in the field of currency investments are experiencing a downturn. This is following the collapse of Naira Nigerian value that occurred in June 2015. There is no clear explanation as to why the Egyptian Pound is weakening, but currently this currency is avoided in forex trading.