GIP is impacted by a variety of factors, including GDP, ties to Great Britain, and more. This currency is managed by the Government of Gibraltar, and since 1825, GIP has played a significant role in the market. The Gibraltar Pound is offered in the same denominations as the British Pound.

If this benchmark is compromised, the governor has the responsibility to notify the Chancellor of Exchequer through a letter, one of which came in 2007 as the U.K. The release of this letter tends to be a harbinger to markets, as it increases the probability of contractionary monetary policy. While just missing out on a place in the top 5 most traded currencies in the world, the Canadian Dollar is another commodity currency in the ilk of the AUD. There are both pros and cons of a single, cross-border currency adopted by multiple economies.

Gaining this knowledge can help you save money, make better decisions, and manage your finances more effectively. The second most traded currency, representing approximately 30% of daily trading volume. Lower interactive brokers forex review liquidity can lead to wider bid-ask spreads, and a higher transaction cost. Slippage can lead to difficulty entering and exiting trades at desired prices.

The foreign exchange market is the largest in the world, with an average of $6.6 trillion in trades per day. Overseas trade as well as investments are greatly aided by the Canadian dollar. The strong value of the Canadian dollar is bolstered by its reputation as a leading exporter of commodities, especially natural gas and oil, to foreign investors. The sound financial system and careful regulatory environment in the nation also support the Canadian dollar’s stability.

Learn about the most traded currencies in the world, as well as how to trade them via CFDs on Capital.com. Increasingly significant in global trade, accounting for about 4-7% of transactions. Popular for international trade and finance, with about 13% market share. The most traded currency, involved in about 88% of all forex transactions. Acting independently, Canada’s central bank draws similarities with the Swiss National Bank because it is sometimes treated as a corporation, with the minister of finance directly holding shares. As the central bank of the United Kingdom, the BoE serves as the monetary equivalent of the Federal Reserve System.

Most Used Currencies In The World 2024: Top 15 Traded

– The Euro is the second most traded currency, with a daily average volume of nearly US$1.1 trillion. This information has been prepared by tastyfx, a trading name of tastyfx LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion.

British Pound Sterling (GBP)

This currency was issued before the end of 1967, and it has served as the official tender ever since. The SGD lump rate is approximately 0.612%, yet traders still choose this currency. Due to some characteristics of SGD, this currency is likewise not an exotic one.

The Swiss franchas become a safe-haven currency due to its stellar track record for bankingsecrecy and financial services. As a result, it usually increases when there isfinancial instability around the world. Next on the list of the top 10 most tradedcurrencies in the world is the Australian dollar, the official currency of theCommonwealth of Australia. The Reserve Bank of Australia (RBA) is responsiblefor issuing the Australian dollar.

• Readily available data for gauging the health of the U.S. economy also makes the dollar a preferred currency pair for speculation.
• Pound sterling is the oldest currency in use, having been introduced in c.800; over 1200 years ago.
• Its stability, liquidity, and the resilient US economy continue to bolster its prominence in international transactions.
• However, variations in the financialperformance of nations using the dollar – either officially or de facto, canalso impact the value of the US dollar.
• Its value is heavily impacted by Bank of Japan (BoJ) policies, Japanese economic data, and Asia’s regional economy.
• The Australian dollar saw an average daily trading volume of $478bn in 2022.

GBP is also another major global reserve currency, trusted by foreign central banks for its stability. It is the third most traded currency in foreign exchange markets after the U.S. dollar and euro. It is also one of the most widely held foreign exchange reserves by central banks. The Japanese yen is commonly abbreviated JPY or can be represented by the symbol ¥. Another component is market capitalization, which is determined by adding the entire value of a musician’s albums sold.

Although the foreign exchange market is often billed as a banker’s game, currencies can sometimes be a great way to diversify a portfolio that has hit a bit of a rut. It’s a market that can also offer tremendous opportunities when other global forums enter the doldrums. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result.

• Additionally, the Reserve Bank of Australia’s monetary policies affects the AUD’s strength against other currencies.
• For traders, these currencies stand out with their deep liquidity and stability, offering lower risk.
• People believe in it, businesses adore it, and it dominates the global financial landscape.
• While smaller currencies might offer them unique opportunities, it is the top 10 currencies here that dominate the forex market with the highest trading volumes.
• As the use of the dollar became more widespread over time, it helped to create a self-reinforcing cycle, one that makes it seem like there is no alternative.

This will also give you access to IG Academy where you can learn how to analyse and trade currency pairs. The forex market is the biggest market in the world, accounting for an average of $6.6 trillion worth of trades each day. Here we take a look at the top 10 most traded currencies, which are involved in nearly 90% of trades. With a daily average volume of US$117 billion, it ranks asthe ninth most traded currency in the world. The Hongkong and Shanghai Banking Corporation(HSBC), Bank of China, and Standard Chartered Bank are authorised to issue allother denominations. Between April 2016 and April 2019, HKD turnover doubled,which pushed the currency from 13th to ninth place globally.

What Are the Major Currency Pairs?

Its exchange rate is fixed at around HK$7.80 to US$1, with the three authorised banks having to deposit dollars with the HKMA when they issue bank notes to keep its price close to this level. A strong yen means the value of the yen is relatively high compared to other currencies, which means more units of other currencies can be exchanged per unit of yen. For example, if $6 (U.S. dollars) are exchanged for ¥1 (Japanese yen), when previously the exchange rate was $4 to ¥1, this means the yen is relatively strong. Conversely, a weak yen means that more units of yen are needed to convert to other currencies.

Why Is the U.S. Dollar the World’s Largest Currency?

The HKD is pegged to the USD within a tight range (7.75–7.85 HKD per USD), and this stability attracts international investment and supports high trading volumes. The currency’s daily trading volume is significant, with much of it driven by Hong Kong’s extensive financial services sector, as well as its deep connection with mainland China’s economy. The Sterling pound, the official currency of the United Kingdom is the fourth most-traded currency with a daily average volume of about $420 billion. It also accounts for about 4.5% of global reserves, making it vital to international trade. The foreign exchange market, also known as forex or FX, is the world’s largest financial market, where currencies are traded. The ‘loonie’, as the Canadian dollar is known as, saw a trading volume of some $526bn in 2022.

The market’s primary powertrend participants are large international banks, with financial centers around the world acting as anchors of trading. Pegging of currency is an economic practice where a country has a fixed exchange system against another country’s currency which facilitates the ease of doing business and regulates inflation. The US dollar gained its total dominance after the World War I after it replaced the pound sterling as the primary reserve currency of the world. As of 2025, the Kuwaiti Dinar (KWD) holds the title for the highest-valued currency in the world. Its exchange rate is consistently strong against other major currencies, with 1 Kuwaiti Dinar often valued at over 3 US dollars. The high value of the dinar is largely due to Kuwait’s wealth from oil exports, its stable economy, and a carefully managed currency policy by the Central Bank of Kuwait.

AUDUSD is one of the major currency pairs and one of the most traded currencies in the world. Demand for the yen on the forex market increases as demand for vehicles, electronics, machine tools, and textiles increases. Additionally, lexatrade review monetary policies by the Bank of Japan influence the yen price action in the market in addition to economic data such as GDP and employment numbers. Readily available data for gauging the health of the U.S. economy also makes the dollar a preferred currency pair for speculation. Consequently, traders are always looking for economic releases such as Non-Farm Payroll, Consumer Price index, and Retail sales that help gauge the health of the U.S. economy, thus, U.S. dollar strength. The dollar holds supremacy in the financial markets, where it serves as a benchmark for international asset appraisals and as the standard currency for trading commodities like gold and oil.

What are the top 10 most traded currencies in the world?

The Monetary authority of Hong Kong is known as the Hong Kong Monetary Authority. The Hong Kong dollar is ranked 9th as the most traded currency across the globe. Both currencies also maintain relationships with commodities, most notably silver and gold. With an inflationary benchmark of 2%, the BoC has tended to remain a shade more hawkish rather than accommodative when it comes to any deviations in prices. As a result, the underlying tends to be very erratic, pushing FX traders to take technical perspectives on a longer-term basis.

The Court of Directors is a governing body appointed by the Crown, made up of five executive members and as many as nine others, including the chair and deputy chair. Jiwon Ma is a fact checker and research analyst with a background in cybersecurity, international security, technology, and privacy policies. Before joining Investopedia, she consulted for a global financial institution on cybersecurity policies and conducted research as a Research Analyst at the Belfer Center for Science and International Affairs.