What is a Forex Pair?
What is a Forex Pair?
A forex pair (or foreign currency pair) is the quotation of two currencies relative to each other, listed on a foreign exchange currency. It is essential to ascertain which currency is associated with each currency code/currency pair. In this case, USD/JPY dictates how many Japanese yen can be bought with 1 USD. However, not all the products we offer are quoted like this. For example, Brent Crude Oil and West Texas Intermediate are quoted as “BRENT” and “WTI” Respectively.
You may find there are nicknames for specific foreign currencies/currency pairs. For example, the currency pair “GBY/USD” is nicknamed “The Cable” from when the exchange rate between the U.S Dollar and the British pound began to be transmitted across the Atlantic ocean but a submarine communications cable.
If there is a time for a currency to be relatively weak, it’s during recessionary periods. A stronger currency entails a rougher time for goods and services to be exported out of the country as those exports are more expensive due to the stronger currency.
We have a relatively light data week ahead regarding the amount of significant data points coming out. However, the economic events are extremely significant in determining the state of their respective economies. Hope you all are staying safe. Here is your week ahead.
In 2020, Silver had a legendary rise from its low during the peak of the Coronavirus lockdowns in March – up over 140%. Analysts (including me) attempted to justify its price and separate its strong correlation with Gold by arguing that Biden’s climate change policies will boost Solar Panels’ use, which extensively uses Silver. This may be a catalyst in the longer term.
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Risk Warning: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money you cannot afford to lose. You should make yourself aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any questions or concerns as to how a loss would affect your lifestyle.
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