Liquid currencies.
This concept is especially important when trading forex, since the
success of trading largely depends on the liquidity of the currency.
Liquid currencies are those monetary units that have a constant demand and can be easily exchanged at any time for other currencies.
It is demand that is the main indicator of liquidity; the faster you can sell the monetary unit you have, the higher its liquidity.
The most liquid currencies on Forex at the moment are:
The US dollar is extremely popular, which means it is in high demand; its liquidity is confirmed by the lowest Forex spread on the currency pairs of which it is a part.
The euro ranks second in terms of turnover on the foreign exchange market, and if previously it was used mainly in payments for European goods and services, now the area of application has expanded significantly.
Japanese Yen - it is used by almost the entire eastern region and in payments for goods produced in Japan.
The British pound is one of the currencies widely used in financial calculations and has gained popularity due to its stable exchange rate.
The Swiss franc is perhaps the most reliable world currency, and it is used to store citizens’ savings and the gold and foreign exchange reserves of banks.
The Australian dollar is mainly used for payments for gold and agricultural products produced in Australia.
The Canadian dollar is sometimes also called the oil currency, since Canada has been the largest exporter of black gold for many years.
Less popular, but still have sufficient liquidity, are currencies such as the New Zealand dollar, Hong Kong dollar, Chinese Yuan, and Russian Ruble.
But for Forex trading, it is still better to choose the most popular and liquid currencies; they allow you to use any Forex strategy due to their low spread. Another positive point is that when choosing, for example, EURUSD, your order will always find a counter one, and the broker will not have to act as the second party to the transaction, which significantly reduces the risk of trading.