The forex market-place offers a lot of options for traders of all levels of experience and with all sizes of bankroll. Whether you’re looking for big gains, or you’re relatively risk-averse, you have plenty of options open to you. If you want to take full advantage of the forex markets, you should look beyond the Dollar, Euro, Pound Sterling and Yen and consider some of the other currencies. A diverse portfolio is a healthy portfolio.
The Swiss Franc, or CHF, is one of the traditional safe-haven currencies on the forex market. This currency is special because, unlike other big central banks, the Swiss National Bank is technically a corporation, with both private and public ownership. Half of the governing body is owned by Switzerland’s sovereign states and the bank is governed in a way that puts a lot of emphasis on economic and financial stability.
The Canadian Dollar, also known as the CAD or “Loonie”, falls under the remit of the Bank of Canada. This bank has the express goals of taking care of Canada’s financial stability, keeping inflation low and stable and managing government funds and public debt efficiently. The bank is similar in some respects to the Swiss National Bank and the Ministry of Finance holds shares in it. The CAD’s value is tied closely to crude oil because the country is such a big exporter of it.
South African Rand
The South African Rand, or ZAR, is something of a wild card. The central bank of the country is the South African Reserve Bank. In the early days, this bank modelled itself on the Bank of England, but today it is a major custodian of gold, as well as a clearing bank and a bank that is known to intervene in the world of forex when necessary. Unlike the CHF, the ZAR can be quite volatile, but no more so than the GBP. The value of the currency is closely tied to precious metals such as platinum and gold, because South Africa is a leading exporter of those commodities.
Whatever currencies you choose to invest in, you should try to build a diverse portfolio. Don’t overlook less popular currencies out of fear of the unknown. These are all major currencies and it is well worth learning what drives their value and why they are so popular with experienced investors.
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