Trading the American Dollar

It is not without reason that the Dollar, more particularly the American dollar, is nowadays the most traded currency throughout the world. In fact, the volume of transactions in this currency on the Forex reaches every year a record 85% of exchanges.

The most logical explanation for this can be found in history. In fact, the American currency has always been considered as the base currency used for the rate calculations of the others. It was actually in 1972 that an international monetary system using the Dollar as reference was implemented.

Despite the fact that this is no longer really the case, in the minds of the traders, the Dollar remains the real reference for the exchange markets. However, the United States of America is not the only place that the American Dollar circulates. In fact other areas of the world, such as the British Virgin Islands, El Salvador, Ecuador and East Timor, use the American Dollar as their principal currency.

The Dollar presents numerous advantages among them the fact that it is the currency used the most for commercial activities throughout the world. Despite this remarkable fact, the American currency is not the most popular on the planet. In fact the Euro recently dethroned the Dollar and took this position.

However that is not all. In fact, if so many investors seem to be so interested in this currency for trading, it is because the Dollar today possesses a huge number of financial markets including the most important. Also, certain currencies, as you have no doubt noticed cam only be exchanged against the Dollar. It is therefore advisable to keep an American Dollar capital if one wishes to profit from them. This is the case for example with the Thai Baht.

Finally, on a more psychological note, the importance given to the American Dollar by the financial specialists and investors creates far more information and analysis than for the other currencies. Because of this, it is easier today to make extensive deductions thanks to the large number of publications available that are linked to this currency. Trends related to the American Dollar are often easier to foresee that those of more exotic currencies. 

 

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