An Explanation of Currencies

Currencies

An Explanation of Currencies

A country’s currency is money in that particular country in a sense that in use or circulation it is circulating coin money or banknotes, otherwise known as currency. In the United States the dollar is considered currency and in most nations that use the currency the amount of money in relation to the economic wealth of that nation is typically measured by the GDP ( Gross Domestic Product). Other names for currency are legal tender, foreign currency, and local currency.

In terms of trade one nation’s currency is the local currency of that nation while another nation’s currency is its national currency. The money itself, also known as the Pound, is a British Pound and the US Dollar is the American Dollar. In international trade the British Pound is the forerunner of the Euro while the dollar is the international currency of the United States. There are other world currencies but those that are most commonly traded and known are the GBP (pound Sterling) and the USD (U.S. dollar). The Euro is the common trading currency for all items other than those defined as local currency.

There are many more world currencies besides the two main ones mentioned. They include the Swiss Franc, Canadian dollar, Japanese yen, Australian dollar, New Zealand dollar, EU ( European Union ) dollar, Swiss franc, and the GBP. When discussing the global monetary system the subject of alternative currencies that are allowed in this transaction can also be brought up. This is an important subject that deserves its own article in its own right.