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Forex

4 Most Reliable Currency Pairs To Trade During This Financial Crisis

The financial crisis is not something new for the world. As time goes by more and more experts expect that the world will be close to the global financial crisis as it was in 2007-2008 years. This of course can have a dramatic effect on the financial markets, including on the forex market. Some analysts think that the ongoing crisis can lead countries to recession. The underlying might be long or short when using derivative products to speculate in the financial markets. This implies that you may be able to benefit from both rising and declining markets. Forex is not a safe haven during economic downturns. Nevertheless, there will always be a method for traders to profit from the market until the downturn wipes out every country on the planet.

 


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As a result of a failing economy, certain currencies or combinations of economically connected currencies may drop. However, there will be others who will step forward to fill the void. In this article, we’ll discuss which are the 4 most reliable currency pairs that are worth trading during a financial crisis.

GBP/USD

The British Pound/US dollar currency pair, known as “The Cable,” is a popular trading instrument. Some traders appreciate the extreme volatility of this currency pair since it provides them with the possibility to make higher profits. The British pound is referred to as the base currency, and the US dollar is referred to as the terms currency, in GBP/USD trading. The exchange rate between thse two indicates how many US dollars are required to acquire one pound of British money.

 

The GBP/USD is the world’s third most traded forex pair, and it represents slightly under 10% of worldwide forex trades. So, if you want to be a good currency trader, particularly with The Cable, you need to know how the two economies operate, otherwise, you won’t be able to make judgments and take the right decision. For short-term trading, GBP/USD is a good choice because of its high liquidity. Low transaction costs and narrow spreads are a result of high liquidity. Because both the UK and the US have a strong economy the risks that these currencies are going to decrease in value significantly are minimized. This is why these currency pairs can be considered one of the most reliable ones while trading Forex.

EUR/USD

Another prominent currency pair to trade during the financial crisis is EUR/USD. As the most well-known currency systems on earth, the US Dollar, and Euro are among the world’s most renowned. The EUR/USD currency pair, which pits the euro against the dollar, is the most actively traded in the world. Forex traders may take advantage of EUR/USD narrow spreads and a broad range of price fluctuations, making it the most liquid currency pair in the market.

 

According to a Central Bank Survey, daily, the US dollar accounts for 87.6 percent of all currency-related transaction activity, while the Euro accounts for just 31.4 percent. But one thing worth mentioning is that the value of the EUR/USD currency pair is always changing since the value of each currency is decided by their respective central banks and the economies of their respective countries.

USD/JPY

The USD/JPY currency pair is well-liked by both seasoned traders and newbies due to its low spreads and great liquidity. A solid reserve currency, the Japanese dollar is now the third in the world after the financial crisis of 2008. Historically, the USD/JPY exchange rate has had a strong relationship with the yield on 10-year US Treasury notes. The Yen tends to depreciate to the dollar when Treasury bond, note, and bill yields increase. As a result of lower borrowing costs, consumers may borrow Yen and invest in higher-yielding dollars.

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There is a strong influence on the USD-JPY pair from the Bank of Japan (BoJ), a well-known market manipulator. Rate announcements follow the publication of interest rates by the Bank of Japan. These comments provide traders and investors a sense of what the BoJ’s policy will be in the future. Data released by Japan’s Statistics Bureau may influence the USD-JPY exchange from time to time. Crude oil trade prices and the USD/JPY exchange rate have traditionally been closely linked. Because Japan is a highly industrialized country that also happens to be a major consumer of this item, this makes sense.

EUR/GBP

The 4th most reliable currency pair to trade during the financial crisis is EUR/GBP. The Euro is matched against the British pound in the EUR/GBP currency combination. The EUR/GBP currency combination is very popular in the world’s financial markets since it contains two of the most often exchanged currencies. It’s no surprise that so many individuals trade EUR/GBP because of the market’s great liquidity and huge volume of ongoing transactions.

 

The EUR/GBP currency pair is included in the list of Minor Currency Pairs. Traders in Europe and the United Kingdom have a strong interest in the EUR/GBP currency combination, which has been exacerbated by the Brexit vote.

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Ifiokobong Ibanga

Ifiokobong Ibanga is the founder of InfoGuideNIgeria.com. You can get in touch with him on Instagram @ifiokobong. If you need a personal assistance on this topic, kindly send a message. Much Love!

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