Currency Pairs To Watch In 2021

Liquidity, volatility and speculation. Which are the best currency pairs to keep an eye out for in 2021? Find out how you could profit from it all.

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Why you should keep an eye out on these currency pairs in 2021

The world of trading has a daily value of $5.3 trillion – all of it done in currency trading - and while that number was a bit higher, we have 2020’s global situation to thank. However, even if the daily exchange fell from $5.6 trillion to $5.3 trillion, it remains the world’s biggest industry. Of course we also have technology to thank for the proliferation of currency trading and speculation. Years back, the arena of forex trading was the sole domain of the elite and the big banks like Morgan Stanley and Goldman Sachs. To even attain knowledge trading USD/CAD would require a specific skill set and key information on the movement of the market. Today, thanks to the ubiquitous presence of the internet and all its associated technologies, people from all over the world can trade.

How to garner success at trading currencies

In order to become a successful currencies trader, a key understanding of the dynamics and movements of the market is required. Luckily there are many ways to skin a cat. Most regulated online broker firms will provide what is known in the industry as a demo account and this can prove to be incredibly insightful. It won’t turn you into a pro overnight but it will certainly get you familiarised, plus you won’t incur any type of financial cost or loss as the demo account is free. It’s also advisable that you join applicable forums to seek out advice and read some published works from key authors on the subject.

EUR/USD

This is the most traded currency pair in the world and for a number of reasons. There’s a lot of trading that takes places between the EU and the United States and thus this currency pair generates a lot of news and buzz. It’s also noted for its liquidity and activeness. In essence, due to it’s popularity, there is a lot information at one’s disposal. Very often traders will receive their data from various EU countries and from the US. The more data you have, the more informed a decision you can make.

GBP/USD

Commonly referred to as The Cable and third in line in terms of popularity, the Great British Pound and the US Dollar are loved and adored by traders world-wide. Thanks to its liquidity and a barrage of financial news available on both currencies, traders are able to profit when speculating on the movements of this pair.

EUR/GBP

The situation between the Euro and the Pound is sure to be one of volatility now that Brexit has been completed. And as the dust settles, there is still a lot that remains up in the air, only adding to the potential volatility of this pair. It’s ripe for quick gains if you play your cards right. However, this pair will maintain its popularity due to their historical legacy. Thanks to a consistent availability of information, it’s worth speculating on this pair.

USD/CAD

Canada is the United States’ third most important trading partner; together the two countries form the most successful North American lands. Canada is also renowned for its slew of natural resources which includes timber, oil and natural gas. For this reason, it’s often referred to by traders as a commodity country. The US buys most of its oil from Canada – up to 48% v the 10% it gets from Saudi Arabia. All these factors work together to equate one of the most liquid currency pairs in the world.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes