TAILIEUCHUNG - Forex On-Line Manual For Successful Trading Chapter 2

CHAPTER 2 Kinds Of Major Currencies And Exchange Systems. . Major Currencies. The . Dollar The United States dollar is the world's main currency. All currencies are generally quoted in . dollar terms. Under conditions of international economic and political unrest, the . dollar is the main safe-haven currency | CHAPTER 2 Kinds Of Major Currencies And Exchange Systems . Major Currencies The . Dollar The United States dollar is the world s main currency. All currencies are generally quoted in . dollar terms. Under conditions of international economic and political unrest the . dollar is the main safe-haven currency which was proven particularly well during the Southeast Asian crisis of 1997-1998. The . dollar became the leading currency toward the end of the Second World War and was at the center of the Bretton Woods Accord as the other currencies were virtually pegged against it. The introduction of the euro in 1999 reduced the dollar s importance only marginally. The major currencies traded against the . dollar are the euro Japanese yen British pound and Swiss franc. The Euro The euro was designed to become the premier currency in trading by simply being quoted in American terms. Like the . dollar the euro has a strong international presence stemming from members of the European Monetary Union. The currency remains plagued by unequal growth high unemployment and government resistance to structural changes. The pair was also weighed in 1999 and 2000 by outflows from foreign investors particularly Japanese who were forced to liquidate their losing investments in eurodenominated assets. Moreover European money managers rebalanced their portfolios and reduced their euro exposure as their needs for hedging currency risk in Europe declined. FOREX. On-line Manual For Successful Trading 75 The Japanese Yen The Japanese yen is the third most traded currency in the world it has a much smaller international presence than the . dollar or the euro. The yen is very liquid around the world practically around the clock. The natural demand to trade the yen concentrated mostly among the Japanese keiretsu the economic and financial conglomerates. The yen is much more sensitive to the fortunes of the Nikkei index the Japanese stock market and the real estate market. .

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