In the foreign exchange market, according to the types of currency pairs, it can be divided into direct currency pairs and cross currency pairs. In the foreign exchange market, more than 70% of investors are conducting direct foreign exchange transactions. What does foreign exchange direct trading mean? Many novices may not understand it yet. Here is an introduction to the foreign exchange direct currency codes and features.

In the foreign exchange market, currency pairs with US dollars are all foreign exchange direct currency pairs. As the base currency of the world, the US dollar has an irreplaceable role in the foreign exchange market. The settlement of other currency pairs is calculated in accordance with the US dollar. Therefore, the currency pair containing the US dollar is called the foreign exchange direct currency pair.

Regarding the direct currency code of foreign exchange, let’s give a few more common examples. The code for EUR/USD is EUR/USD, the code for USD/JPY is USD/JPY, and the code for AUD/USD is AUD/USD, where USD stands for US dollar , Another code represents another currency.

Direct foreign exchange is particularly suitable for trading. Its main features are as follows: First, the analysis is simple. The U.S. dollar is the basic settlement currency in the foreign exchange market. If the transaction is straightforward, investors only need to analyze the trend of a single currency, but if you want to trade foreign exchange crosses, investors must analyze the two currencies separately, and finally integrate , More troublesome.

Second, there is a higher possibility of a unilateral foreign exchange market. The volatility of foreign exchange direct trading is smaller than that of cross trading, and the risk is much lower than that of cross trading. Because the volatility of the US dollar is relatively low, the possibility of unilateral market is higher.

Third, direct foreign exchange is less affected by political factors than cross trading. For example, when the Bank of Japan regularly intervenes in the yen exchange rate, investors can find that when the central bank intervenes, the volatility of cross trading is significantly higher than that of direct trading.

The above is an introduction to the currency codes and characteristics of foreign exchange direct trading. The FXCM platform provides investor transactions in 42 currency pairs including only hope and cross trading.