Currencies – A Brief Overview
We all know that different countries from around the world trade with their own money, known as their “currencies”. These countries use their currency to trade with each other, and with the US Dollar. Currencies can be traded in pairs (like Pound Sterling/Crown Prince’s pound), they can be bought and sold like stock (in the US), or they can be traded independently (like Australian dollar). Some countries issue their own coins, such as the South African Krugerrand, which are known as “Zermots”.
Currencies trade on major exchanges. These are the major financial centers of the world, where trade in all currencies takes place. For example, London (the UK) and New York (US) both trade in Pound Sterling. The New York Conference happens every six weeks. The main economic centers of the world trade in US Dollars, as it is the “world’s” currency. Currencies are usually traded on these exchanges because they are more stable than the Euro or the Asian economies.
Another way that Currencies can be traded is through what is called a “forex swap”, when one currency is purchased at a lower price (at a “counter”, or a forex broker) and sold back to us at a higher price (using a forex exchange). This process of exchanging the different currencies is also known as Forex trading. Many people find that this type of trading is very profitable for them.