The forex market offers high profitability potential for all kinds of traders and financial investors.

The best opportunities for profits in this highly liquid market are often found by trading the most liquid and most traded currencies which also charge the narrowest spreads.

To position yourself to profit from the market, you better learn which are these most traded currencies and the central banks behind them plus any unique characteristics that may impact on prices.

1.The Mighty Dollar (USD) – $

Over 85% of all currency exchanges involve the dollar as one half of the currency pair.

For this reason, almost every forex trader keeps a sharp lookout for the decisions made by the US Federal Reserve which is America’s central banking body.

The Federal Reserve has an organ within it known as the Federal Open Market Committee (FOMC).

It is this FOMC that is responsible for US monetary policy and dollar interest rates, both of which have a direct and instant impact on forex market prices for the USD.

2.The European Euro (EUR) – €

This is considered the mighty dollar’s nemesis and is controlled by the European Central Bank which is headquartered in Frankfurt, Germany.

The bank’s executive council works in much the same way the FOMC acts for the US Federal Reserve.

The council formulates and supervises monetary policy and sets interest rates.

3.The Sterling Pound (GBP) – £

Referred to as the queen’s currency, the British Sterling pound is one of the most traded currencies globally.

It is issued and controlled by the Bank of England (BoE). The bank’s 9-member Monetary Policy Committee is responsible for determining currency interest rates and England’s monetary/fiscal policy.

4.The Japanese Yen (JPY) – ¥

The Japanese Yen is considered as Asia’s champion. It is a stable currency with very low interest rates and that makes it popular for carry trades and for trading against currencies that experience high fluctuations.

The currency is issued and controlled by the Bank of Japan (BoJ) which also governs all aspects of Japan’s fiscal policy, market operations, and economic analysis.

5.The Swiss Franc (CHF)

It is popularly referred to as the banker’s currency as it is a stable, high value currency from a country that is favored by international bankers, corporations, and large investors.

Unlike other central banks which are government bodies, the Swiss National Bank is a corporation that is both privately and publicly owned and operates under special regulation.

The governing board of the bank is responsible for the country’s economic and financial stability and major policy decisions are made by 3 heads of major banks who meet every quarter.

6.The Canadian Dollar (CAD)

Nicknamed the Loonie, the Canadian dollar is backed by a low-inflation economy and is issued and controlled by the Bank of Canada (BoC).

Almost similar to the Swiss National Bank, the BoC is treated as a specially regulated corporation where the country’s Ministry of Finance directly owns shares.

The CAD tends to move in ranges of around 40 pips and is tightly related to the price of crude oil.

7.The Australian Dollar (AUD)

Issued and controlled by the Reserve Bank of Australia, the Aussie dollar is tightly intertwined with commodity prices especially gold and silver.

The Reserve Bank’s 6-member board makes decisions pertaining to interest rates, inflation control, and general monetary policy.

Of the mentioned currencies, the AUD offers the highest yield and is a favorite with carry traders especially when paired up against the Japanese Yen. Like most other currency majors, it trades at an average of 30 to 40 pips.

8.The South African Rand (ZAR)

This is the new kid on the block and is viewed by investors as a strong emerging opportunity.

With a structure similar to that of the Bank of England, the South African Reserve Bank is the monetary authority that decides, implements, and oversees monetary policy including interest rates.

Unlike most other banks, the South African Reserve Bank is fully privately owned by about 600 shareholders.

A 14-member board that meets 6 times each year chaired by the governor steers the bank’s activities.