The US dollar (USD) is without doubt the most important and popular currency in the world, as it has been for many years, followed by the Euro (EUR), Japanese Yen (JPY) and British Pound Sterling (GBP). We are able to judge long and short-term price action by looking at the dollar’s value relative to the following currencies and weighting:
Euro (EUR) 57.6%; Japanese Yen (JPY) 13.6%; British Pound Sterling (GBP) 11.9%; Canadian Dollar (CAD) 9.1%; Swedish Krona (SEK) 4.2% and Swiss Franc (CHF) 3.6%
It is practical to trade on the dollar’s strength and weakness through currency pairing – a currency pair being defined as the quotation of the relative value of a currency unit against the unit of another currency in the foreign exchange market. The currencies listed above constitute the main “crosses” for trading purposes.