Benefits of trading the US dollar (USD) in 2016
There has been an upward trend in the value of the US dollar against the British pound over the past year, and the US dollar has risen significantly when reports revealed the UK voted to leave the EU. The UK’s exit from the European Union was announced on 06/24/2016, and at times during intraday trading, the dollar was up 10% against the pound sterling.
According to an article published in May 2016, Governor of the Bank of England, Mark Carney, warned “A vote to leave the EU could have significant economic effects – on the exchange rate, on demand and on supply potential the economy – which could affect the appropriate framework for monetary policy. “
The US dollar (USD) is the most traded currency
The FOREX market is by far (in terms of volume traded) the largest market in the world. According to a study conducted in April 2013, approximately $ 5.3 trillion in foreign currency was exchanged daily. Speculative trading makes up a large part of this figure.
The US dollar is the most traded currency in the world, which means it is very liquid. Therefore, it is easy to buy or sell US dollars because there is a constant flow of supply and demand. Other financial assets, such as popular stocks, for example, shares of Apple Inc., can also be considered very liquid. This is a great advantage, as it allows traders to easily enter or exit a position, and it also gives investors the opportunity to trade a large asset at large volumes.
The US dollar offers good levels of volatility
The US dollar is considered a hard currency (its value is unlikely to fluctuate significantly.) This gives traders some stability while trading and allows them to profit from sharp declines in the price of another currency, without too much risks. for them.
The US dollar is used as the national currency of many countries other than the United States of America, & most of the world’s commodities are valued in US dollars. Therefore, buying dollars can be used to hedge against risk in other positions, while also allowing for a more diversified portfolio. There are also some advantages that are true when trading any currency, for example, the markets are open 24 hours a day (5 days a week).