The best currencies for trading

Forex trading is mainly focused on the 5 "main" currencies. This is because the governments of their respective countries are stable, their economies are healthy and their central banks take steps to contain the risk of inflation.

The US dollar (USD): The dollar is the most exchanged currency in the world, it represents 86% of all currency trading transactions.

The euro (EUR): The euro is the second most exchanged currency, representing 37% of all currency transactions. The euro replaced the German deutschmark, which, prior to the euro's creation, represented 25% of all forex transactions.

The Japanese yen (JPY): Coming in at third place, the yen is primarily traded against the dollar and the euro, and it represents 20% of the world's exchanges. The demand for Japanese yen is mainly due to Japanese companies repatriating their sales profits. The yen is therefore affected by those companies' financial results as well as the real estate market.  

The British pound (GBP): The GBP is the currency that is most often traded against the USD and the EUR, and the fourth worldwide, representing 17% of all currency trading. 34% of all currency trading passes through London's City, which is the currency trading capital of the world.

The Swiss franc (CHF): The CHF is perceived as being a safe currency. Its economy is stable but this hardly justifies its rank amongst the major currencies. The fact that investors secure their assets by buying CHF is due to its banking system's solid reputation. The Swiss franc tends to be rather volatile due to its lack of liquidity with regards to the other main currencies.