Currencies

Currencies

A currency in the simplest definition is currency in circulation, usually in use or circulating as a means of payment, but generally in use as a form of exchange. Currencies are traded for their value, their gain or loss, in the same way as companies trade for the value of their stocks. The two most widely traded forms of currency are US dollars and British pounds. Other major currencies are Swiss francs, Canadian dollars, Japanese yen and Eurodollar.

Currencies are usually issued by governments around the world and are usually the legal tender of that government. The value of a certain currency is based on the monetary authorities of the issuing nation, its gold reserves, and other factors. When the supply and demand for that particular currency is in balance the value of the currency usually increases. The main trading centers of currencies are New York, Tokyo, London, and Hong Kong. Although a number of countries issue their own coins, the major currencies that are traded on the Forex exchange market are those of nations that have official trading partners.

Usually issued by governments, these coins are traded as legal tender in countries that have a stable economy, central government and a stable economy. The legal tender nature of these currencies make them easily convertible into other currencies that have a high liquidity. Some countries issue their coins for collectors and others for commemorative purposes. These coins usually carry the name of the issuing government, emblem, and date of issue, and may also bear a portrait of a national leader.