Knowledge of foreign currency and their outlooks are essential for world trade. Thus, one way to get a good grasp of this is to check out the market and the viability of each money against each other. You should know this before any investment so that you will be able to get ahead. Here are the most important ones:
Euros, Pounds, and Francs
The Euro has taken over to be the predominant unit of exchange in Europe, although other essential currencies are the British Pound Sterling and the Swiss Franc. This is because of the institution of the Eurozone within the European Union, which paved the way for the further integration of the markets and other aspects of the European financial situation. They did this as a counterweight to the hegemony of the US dollar as a reserve. Today, the Euro is one of the most reliable reserve currencies available, due to the robustness of its backing.
The New World
The currency of the New World is indisputably the US Dollar. It has been the baseline from which foreign currencies are rated ever since the Bretton Woods accords. This basically converted the US Dollar to a gold-like entity, with the value of all currencies pegged unto it. However, the invincibility of the dollar is today in question. Competition from other currencies and debt is eroding the value of the dollar as a reliable foreign exchange. Still, most reserves are in dollars.
Brazil, Russia, India, China, and South Africa
These countries are the emerging powers in the economic, political, social, and military spheres. Their currencies may be gaining prominence due to their agreement to trade in each other’s currency during their most recent summit. The coins of these countries, which are the real, ruble, rupee, renminbi, and the rand, still have a long way to become reliable reserves. This is due to the many problems which still confront their monetary systems and their economic frameworks.
The Asian Tigers
The Asian Tigers have stable currencies. Hong Kong, Japan, and Korea all have excellent economies and strong trade links with the outside world. The Hong Kong Dollar and the Japanese Yen are some of the most traded in the foreign currency market. The South Korean Won still has to grapple with inflation for it to be able to compete, as well as the volatility of its still existing war with the North. These currencies have the potential to be good but are very volatile, so they need to be traded with caution. For those with business in Asia, however, dealing with these currencies correctly is a must.
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