What Makes a Currency Exotic?
From Our Currency Research Team
Strictly speaking, in foreign-exchange trading, any currency that's not one of the seven majors is considered an "exotic" currency. So in other words, any currency besides the U.S. dollar, euro, British pound, Japanese yen, Canadian dollar, Swiss franc, and Australian dollar.
If you want to trade these seven major currencies, it's fairly easy to do so either by buying a currency ETF (like a euro ETF or Japanese yen ETF), or by investing in a foreign currency CD. You can also easily buy options for any of these, or trade them in the spot foreign-exchange market.
But what if you want to trade the exotic currencies? These are the currencies that are located "outside the box" — that don't fit neatly with the seven most commonly traded currencies.
First of all, you need to have a trader's blood. That's because these currencies are mainly tied to volatile emerging markets. That means these currencies can move fast — and you can either make or break your trading account very quickly.
These exotic currencies include:
NZD = NZ$ = New Zealand Dollar = Kiwi CNY = Chinese yuan HKD = HK$ = Hong Kong Dollars AED = Dirham = United Arab Emirates currency INR = Rupee = Indian currency BRL = Real = R$ = Brazilian currency RUB = Ruble = Russian currency CZK = Kč = Czech KorunaDKK = kr = Danish KroneHUF = Ft = Hungarian Forint. MXN = Mex$ = Mexican Peso NOK = kr = Norwegian krone PLN = zl = Polish Zloty. SGD = S$ = Singapore DollarZAR = R = South African Rand SEK = Swedish crown = kr = Swedish Krona THB = Thai Baht ISK = Ikr = Icelandic krona
Please look for more information on how to tame these exotic currencies coming in the months ahead.
Posted at 11:32 AM in exotic currencies Permalink Comments (0) TrackBack (0)
June 25, 2008
My Top Seven Currency-Trading Tricks
From Our Currency Analyst Sean Hyman:
If you're a stock trader or an avid financial news junkie, then you already have an edge over other beginning currency traders.
You just have to know how certain currencies react to the markets. Here are my top seven insider's tricks for "stock-picking" in the currency market.
1. Over a long period of time, the health of the U.S. economy influences the Canadian dollar. So if you're watching the U.S. markets, you know how the Canadian dollar will perform long-term. The U.S. depends on Canada for oil, lumber etc. So when Canada's major trading partner suffers, so do they.
2. The Canadian dollar (CAD) is highly influenced by oil. That means as oil goes up, it provides support for the CAD.
3. Gold is one of Australia's major exports, therefore the price of gold influences the Australian dollar (AUD). So as gold rises, the AUD rises.
4. The Japanese yen is the market gauge for risk. So when the Dow goes down, the yen generally goes up. When the Dow goes up, the yen generally goes down.
5. Agricultural prices affect the New Zealand dollar (NZD). That means as agriculture prices increase, it provides support for the NZD.
6. Japan likes to have a "cheap" currency. Since they are major exporters, they want their goods to appear very inexpensive.
7. The Eurozone and the U.K. have similar economies. So if you see the Euro or British Pound go upward, the other is likely to go up also. This is why in many years EUR/GBP will range trade. Range trading is where there is no definable trend upward or downward. It's basically sideways.
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