The Top 10 Most Traded Currencies in the World
The global foreign exchange (forex) market is the largest and most liquid financial market in the world, with over $7.5 trillion traded daily as of 2024. At the heart of this vast marketplace are a handful of major currencies that dominate global trade, investment, and speculation. In this article, we’ll break down the top 10 most traded currencies and explore why they hold such influence.
1. United States Dollar (USD)
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Nickname: Greenback
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Market Share: Over 88% of all forex transactions
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Why It Dominates:
The USD is the world’s primary reserve currency and is widely used in global trade and finance. It serves as the benchmark for commodities like oil and gold and is held in massive quantities by central banks worldwide.
2. Euro (EUR)
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Nickname: Fiber
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Market Share: About 31% of daily trades
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Why It’s Popular:
Representing the 20 countries in the Eurozone, the euro is the second most traded and held currency. It benefits from a stable political and economic framework and is seen as a key alternative to the USD.
3. Japanese Yen (JPY)
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Nickname: Yen
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Market Share: Around 17%
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Why It’s Traded:
Japan’s strong manufacturing and export-based economy gives the yen significant global presence. It’s also a favorite in carry trades due to Japan’s historically low interest rates.
4. British Pound Sterling (GBP)
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Nickname: Cable
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Market Share: Approximately 13%
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Strengths:
The GBP is known for its volatility and is favored by traders for its wide price swings. The UK’s financial sector, centered in London, plays a major role in global forex volume.
5. Australian Dollar (AUD)
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Nickname: Aussie
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Market Share: Around 6%
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What Drives It:
Often referred to as a “commodity currency,” the AUD is heavily influenced by exports of minerals and metals. It’s also seen as a proxy for Asian economic growth.
6. Canadian Dollar (CAD)
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Nickname: Loonie
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Market Share: Around 5%
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Key Influences:
The CAD closely tracks crude oil prices, as oil is one of Canada’s major exports. It is often traded against the USD due to strong economic ties between the two nations.
7. Swiss Franc (CHF)
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Nickname: Swissie
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Market Share: About 5%
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Why It’s Trusted:
The Swiss franc is considered a “safe haven” currency, known for stability, low inflation, and neutrality. It becomes especially popular during times of global uncertainty.
8. Chinese Yuan (CNY)
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Nickname: Renminbi or RMB
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Market Share: Around 3% and rising
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Growing Influence:
As China continues to open its financial markets and increase international trade, the yuan is gaining traction. Efforts by China to internationalize the currency, including its inclusion in the IMF’s SDR basket, are boosting its profile.
9. New Zealand Dollar (NZD)
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Nickname: Kiwi
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Market Share: About 2%
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Economic Role:
Like the AUD, the NZD is also a commodity currency tied to exports like dairy and agricultural products. It’s often traded for its interest rate differentials and strong ties to Asian markets.
10. Singapore Dollar (SGD)
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Market Share: Just under 2%
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Why It’s Notable:
Singapore’s strategic role as a financial hub in Asia, combined with its political stability and disciplined monetary policy, has helped elevate the SGD’s role in regional forex trading.
Final Thoughts
Understanding the most traded currencies gives traders, investors, and businesses insight into where the majority of global liquidity lies. These currencies are not only deeply interconnected with their respective economies but also with global financial trends. Whether you’re new to forex or a seasoned trader, keeping a close eye on these top currencies is essential for navigating the world’s largest market.
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