Why do three currencies represent 80% of the foreign exchange (FX) market trades?

A) These hard currencies are tied to the gold-standard.

B) They have the lowest interest rates and highest GDP.

C) The three main trading centers are located in these countries.

D) These hard currencies represent the largest industrialized economies.

Question

Business

Baby

10 July, 07:38

Why do three currencies represent 80% of the foreign exchange (FX) market trades?

A) These hard currencies are tied to the gold-standard.

B) They have the lowest interest rates and highest GDP.

C) The three main trading centers are located in these countries.

D) These hard currencies represent the largest industrialized economies.

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Answers (1)

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Larry · Answer 1

A, These hard currencies represent the largest industrialized economies.

Explanation:

The hard currencies are Euro, Dollar, and Yen.

Euro is the currency that held by most industrialized nations in Europe and Dollar is the currency that held by most industrialized nation in north America. Both of these currencies represent the largest portion of the Currency market.

Technically, Chinese yuan is the one that circulated the most in Asian Market. But this currency is strictly regulated by the Chinese government and is not traded in the FX market. Japanese Yen held the second largest position in the Asian Market.