Buying And Selling Currency Pairs Part 2

G10 Currencies

The G10 currencies are ten of the most heavily traded currencies in the world, which are also ten of the world’s most liquid currencies.

Traders regularly buy and sell them in an open market with minimal impact on their own international exchange rates.

The Scandies

Scandinavia is a subregion in Northern Europe, with strong historical, cultural, and linguistic ties.

The term “Scandinavia” in local usage covers the three kingdoms of Denmark, Norway, and Sweden.

Together, their currencies are known as the “Scandies“.Back in the day, Denmark and Sweden established the Scandinavian Monetary Union to merge their currencies to a gold standard. Norway joined later.

This meant that these countries now had one currency, with the same monetary value, with the exception that each of these countries minted their own coins.

But then World War I happened, and the gold standard was abandoned and the Scandinavian Monetary Union disbanded. These countries decided to keep the currency, even if the values were separate from one another. And this remains the state of things.

If you notice their currency names, they all look similar. That’s because the word “krone or krona” literally means “crown”, and the differences in spelling of the name represent the differences between the North Germanic languages.

Crown currencies. What a cool name huh?

I don’t know about you, but saying “Hook me up with some crowns yo.” sounds way cooler than “Hook me up with some dollahs yo.”

SEK and NOK also have cool nicknames, “Stockie” and “Nokie“.

So when paired with the U.S. dollar, USD/SEK is read “dollar stockie” and USD/NOK is read “dollar nockie”.

CEE Currencies

“CEE” stands for Central and Eastern Europe.

Central and Eastern Europe is a term encompassing the countries in Central Europe,  the Baltics, Eastern Europe, and Southeast Europe (the Balkans), usually meaning former communist states from the Eastern Bloc (Warsaw Pact) in Europe.

Central and Eastern European Countries (CEECs) is an OECD term for the group of countries comprising Albania, Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, the Slovak Republic, Slovenia, and the three Baltic States: Estonia, Latvia, and Lithuania.

Regarding the FX market, there are four main CEE currencies to be aware of.

BRIICS

BRIICS is the acronym coined for the association of five major emerging national economies: Brazil, Russia, India, Indonesia, China, and South Africa.

Originally the first four were grouped as “BRIC” (or “the BRICs”). BRICs was a term created by Goldman Sachs to name today’s new high-growth emerging economies.

BRIICS is the term created by the OECD, when it added Indonesia and South Africa.

Summary

Whew! That was a lot of information on currencies but you just raised your FX IQ points! 🧠

Let’s summarize what you’ve learned in a series of questions:

What is a currency pair in forex?

A currency pair is a pairing of currencies where the value of one is relative to the other. For example, GBP/USD is the value of the British pound relative to the U.S. dollar.

What are the major currency pairs?

Major currency pairs (“majors”) are those that include the U.S. dollar and the most frequently traded. There are seven of them: EUR/USD, USD/JPY, GBPUSD, USD/CAD, USD/CHF, AUD/USD, and NZD/USD.

What are the currency crosses?

Currency crosses (“crosses”) are the more frequently traded currencies that do NOT include the U.S. dollar in their pairing. Crosses include EUR/GBP, EUR/CAD, GBP/JPY, EUR/CHF, EUR/JPY, etc.

How many currency pairs exist?

There are HUNDREDS of currency pairs in existence but not all can be traded in the FX market. The United Nations currently recognizes 180 currencies. If you were to pair each currency up with another, it’s a lot.

Reprinted from babypips, the copyright all reserved by the original author.