The most commonly traded currency in foreign exchange markets is the:
(A) euro.
(B) U.S. dollar.
© Chinese yuan.
(D) British pound.

The U.S. dollar holds the title as the most commonly traded currency in foreign exchange markets, accounting for over 80% of all forex transactions. Its dominant status is often attributed to the strength of the U.S. economy, stability of the government, and the dollar’s role as the world’s primary reserve currency. This makes it integral to global trade and investment, leading countless traders to rely on it as a benchmark.

When trading currencies, one common mistake is to overlook global events that can affect exchange rates. Economic indicators, political unrest, and interest rate changes can all cause significant volatility. Staying informed and using tools like economic calendars can help traders navigate these impacts and improve their decision-making process.