Currency Cross Pair , please note that almost 90% of all transactions in this world (export / import) are related to US Dollar. And because of this, the US Dollar has become a source of currency reserves in the world, including myself, even though there are few. And maybe we wonder why it should be US Dollar and not rupiah or other currency.
Why Must Cross Currency Trading
Most of the trade in commodities (oil, coal, gas, etc.) and agriculture uses US Dollar prices. If there is a country that will buy oil, coal, or gas from another country they have to change the price first into US Dollar before buying it. This is why most countries use US Dollars as a reserve for their currencies so that their trading transactions can run quickly.
Yes the point is that the US Dollar is used as the main reference currency for the price difference between the two parties so that the transaction will run quickly. Then, what if there is no reference currency in trading? for example, Indonesia (Rupiah) wants to sell coal to China (Yuan). Answered by yourself!
Because almost all transactions use US Dollars, one thing to think about is how much is today’s US Dollar currency, weakening or strengthening? .
A strengthening or weakening of the dollar will affect the value of the currency pair, for example:
Major currencies such as GBP / USD, EUR / USD, USD / JPY, USD / CHF
Pair commodities such as AUD / USD, NZD / USD, CAD / USD
When you trade 7 currency pairs that are very popular above then you are actually dealing with a sentiment whether they are US Dollar Pro or Anti US Dollar so the value of the currency pair will be affected.
Because every country has unequal economic power, the movement of its currency will continue to fluctuate. So we will also have many opportunities to choose what currency pairs can be used for trading and generate large profit opportunities.
The same is the case when we trade shares in an exchange that provides a lot of options for trading or investment so that we are not only bound by one choice.
With currency cross pair trading (not including the 7 popular currencies above) we will increase the chances of making profit.
When we trade currency cross pair basically we are increasing the opportunity to get profit. This is due to the sentiment of the Pros and Cons of the US Dollar and the differences in the economic strength of each country. For example, you will have a very big chance when trading currency cross pair where one currency is stronger against the US Dollar and the other is weaker against the US Dollar.
When you look at the graph, almost all major currencies are sideways doing Wait and See, then you will most likely see opportunities when looking at the currency cross pair chart. The majority of forex traders trade major currencies but you can become a forex trader minor by trading currency cross pair to find profit opportunities.