The United Nations recognises 180 currencies, but some are far more in-demand than others. Whether you want to choose a pair for forex trading or you are a business that wants access to the most-used currencies, knowing the top traded currencies can help you navigate global markets.
Using data from the Triennial Central Bank Survey (which shows the foreign exchange turnover in April 2022), let’s take a look at the ten most traded currencies.
1. US Dollar
Some speculate the US dollar’s dominance won’t last forever, but it hasn’t been knocked off its throne yet. It is both the most used currency in the world on foreign exchange markets and the strongest currency in the world.
Numerous countries peg their own currencies to the US dollar, and it acts as the global reserve currency, meaning it is the most-used currency by other countries to store for future transactions or to hold value.
This is largely due to the USA’s role as a global economic power, with the country boasting the world’s largest GDP.
Because the dollar is everywhere, it also appears in many of the most traded currency pairs when combined with other entrants on this list, such as USD/EUR and USD/GBP.
2. Euro
While the Euro isn’t quite up there with the US dollar in the popularity stakes, it is still one of most traded currencies in the world.
As the currency of the Eurozone, which makes up 20 EU countries, it plays an important role in global affairs and international trade. Since it is so widely used, it is popular among central banks and investors alike.
3. Japanese Yen (JPY)
Japan has long played a strategic role among investors. Not only is it an economic powerhouse in its own right, but its location in Asia offers diversification for investors who are otherwise focused on the west, giving the Japanese yen an appeal as a safe-haven asset for when things get shaky.
4. British Pound (GBP)
The British pound might not be up there with the dollar, but it is the oldest currency in the world that is still in use. It has a history dating back around 1,200 years!
While the UK has faced a challenging few years following Brexit and a revolving door of national leaders, it remains a huge player in the global financial system. As a result, the “pound sterling” has secured a top spot.
5. Chinese Renminbi (CNY)
The Chinese Renminbi, also referred to as the yuan, just makes it into the top 5 currencies in the world by trade volume. The currency has been rapidly rising in prominence over the last few years, with some speculating it could even become the leader of the pack one day!
In fact, it may come as a surprise to some that the Chinese renminbi isn’t higher on the list. However, China has chosen to control the value of its currency, meaning it isn’t fully convertible right now. Still, its increasing use in international trade has helped it secure a top spot.
6. Australian Dollar (AUD)
The Australian dollar isn’t for the faint of heart. Since the nation is a major exporter of raw materials, it is known as a “commodity currency” — meaning it is hugely affected by the price swings of commodities.
It also has strong links with Asian economies, which gives the Aussie dollar further significance. For instance, the Australian dollar and the Japanese yen are a common currency pair.
7. Canadian Dollar (CAD)
Canada’s currency might be known as the “loonie,” but fear not — it’s named after the common loon bird and doesn’t allude to insanity.
Similarly to the Australian case, the Canadian dollar is highly influenced by oil prices due to Canada’s energy exports. Plus, its proximity to the US makes it popular among traders who want exposure to North America.
However, Canada has plenty going for it in its own right. Above all, it has a strong reputation for stability.
8. Swiss Franc (CHF)
Switzerland is known across the world for its stability and neutrality, and its currency is a reflection of that. During times of political or economic chaos, many currency traders reach for the Swiss Franc for some (relative) peace and quiet.
9. Hong Kong Dollar (HKD)
The Hong Kong dollar is a curious case. While Hong Kong is largely controlled by China, its currency is pegged to the US dollar (meaning their value is linked).
It’s highly traded due to trade with mainland China, tourism, and investment flows.
Some have questioned whether Hong Kong will retain its significance due to its relationship with China. But for now, it remains an important business and financial centre.
10. Singapore Dollar (SGD)
Singapore may be small in size, but it has a large role in global markets. The stability of the Singapore dollar and the draw of Singapore as a financial hub make the currency a popular choice. Small but mighty!
Currencies Decoded
Combined, the ten currencies outlined above make up a huge chunk of the foreign exchange market’s daily $6 trillion trading volume.
If you are converting between one or more of the currencies outlined here, securing the best exchange rate and having a multi-currency account where you can hold your funds between trades. Omega offers a global business account to help with this, offering the chance to store more than 20 major currencies in local bank accounts, making it easier to operate in a global environment.
