The foreign exchange market, or forex, is the most traded financial market in the world. It is a decentralized market where currencies are exchanged 24 hours a day, five days a week. Forex traders aim to make profits by buying and selling different currencies based on their value fluctuations. In order to make informed trading decisions, it is important to keep an eye on the top currency rates that are likely to have an impact on the forex market in 2021. Here are the top 5 forex currency rates to watch out for this year:
1. US Dollar (USD)
The US Dollar is the most traded currency in the world and is the primary reserve currency for most countries. In 2020, the USD saw a lot of volatility due to the COVID-19 pandemic and the uncertainty surrounding the US presidential election. In 2021, the US Dollar is expected to remain a dominant force in the forex market, as the global economy continues to recover from the pandemic. Investors will be watching closely for any changes in US monetary policy, as well as any developments in the ongoing trade war with China.
2. Euro (EUR)
The Euro is the second most traded currency in the world and is the primary currency of the European Union. In 2020, the EUR saw a lot of volatility due to the COVID-19 pandemic and the uncertainty surrounding Brexit. In 2021, the Euro is expected to remain volatile as the EU continues to grapple with the pandemic and its economic fallout. Investors will be watching for any changes in EU monetary policy, as well as any developments in the ongoing Brexit negotiations.
3. Japanese Yen (JPY)
The Japanese Yen is the third most traded currency in the world and is the primary currency of Japan. In 2020, the JPY saw a lot of volatility due to the COVID-19 pandemic and the uncertainty surrounding the global economy. In 2021, the Japanese Yen is expected to remain a safe-haven currency as investors seek refuge from economic uncertainty. Investors will be watching for any changes in Bank of Japan monetary policy, as well as any developments in the ongoing tensions between Japan and China.
4. British Pound (GBP)
The British Pound is the fourth most traded currency in the world and is the primary currency of the United Kingdom. In 2020, the GBP saw a lot of volatility due to the COVID-19 pandemic and the uncertainty surrounding Brexit. In 2021, the British Pound is expected to remain volatile as the UK continues to negotiate its future relationship with the EU. Investors will be watching for any developments in the ongoing Brexit negotiations, as well as any changes in Bank of England monetary policy.
5. Chinese Yuan (CNY)
The Chinese Yuan is the fifth most traded currency in the world and is the primary currency of China. In 2020, the CNY saw a lot of volatility due to the COVID-19 pandemic and the ongoing trade war with the US. In 2021, the Chinese Yuan is expected to remain volatile as the US-China trade war continues and as China continues to grapple with the economic fallout from the pandemic. Investors will be watching for any changes in People’s Bank of China monetary policy, as well as any developments in the ongoing trade negotiations with the US.
In conclusion, forex traders should keep a close eye on these top 5 currency rates in 2021 as they are likely to have a significant impact on the forex market. It is also important to stay informed about global economic and political developments that could affect these currency rates. By staying up-to-date and making informed trading decisions, forex traders can increase their chances of success in the market.
