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Forex Markets

Spread betting Forex

Foreign exchange or ‘Forex’ is the largest market in the world. More Forex trades and total value of trades are executed in the financial marketplace globally than any other, including shares and commodities.

In Forex, one currency is exchanged or traded for another and therefore each currency ‘pair’ is a market in itself. i.e exchanging Dollars for Sterling is quoted as USD/GBP or Euros against Japanese Yen is quoted as EUR/JPY. The exchange rate between two currency pairs is a floating rate and therefore the rate (or price) moves up or down daily based on influencing factors like economic, political or national conditions. The variability of this price results in opportunities for speculative traders to trade on the rising or falling market.

When you go on holiday and exchange for example, your Sterling money for physical Euros, Exchanges enable forex to be traded without the need to move physical cash around. When you trade your holiday money the rate you are given is known as an exchange rate i.e. the price for exchanging currencies right here and now. When spread betting exchange rates the current spot price for the currency pair is similarly used.

Major Forex currencies

Major currencies are those that are most actively traded in the market place. They make up over 80% of the total Forex market. As a result these currencies become more competitively priced among online Forex trading companies. Spreads therefore become very tight and market data is widely available.

Examples :

British pound (GBP) / US dollar (USD) - often called 'Cable'

British pound (GBP)/ Euro (EUR)

Euro (EUR) / US Dollar (USD) 

US dollar (USD) / Japanese yen (JPY)

US dollar (USD) / Canadian dollar (CAD)

Minor Forex currencies

Minor currency pairs as you might expect, compared with majors are not traded as actively. This can create greater volatility in price and therefore opportunities to make profits however the risks are therefore greater and the spreads tend to be wider.

Australian dollar (AUD) / New Zealand dollar (NZD)

Euro (EUR) vs. Japanese yen (JPY)

British Pound(GBP) / New Zealand (NZD)

All of our currency pair markets along with their spreads and margin rates can be viewed in our Forex price list.

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