Chapter 3: Forex Currency Designation

In the usual commodity market, goods are sold for money. What is the situation on the world currency market, where money itself is a commodity? Everything is very simple – on Forex one currency is traded relative to another, i.e. a certain number of units of another currency is offered for a unit of one currency.

Since there are many types of currencies, to avoid confusion, the International Committee for Standardization has assigned each currency a code designation of three Latin letters. The first two letters identify the country of origin of the currency, the third letter is usually (but not always) the first letter of the currency unit of that country. For example, in the code designation JPY, the first two letters JP define the country Japan, and the third letter Y defines the monetary unit of Japan – Yen.

Despite the rapid growth of Forex currency transactions in Euro (EUR), the central currency on the world currency market is still the U.S. dollar (USD). Trading volumes in different currencies on Forex are not equal. The chart for comparison shows the percentage of buy/sell transactions by major currencies on the world currency market in 2004 (according to the data of the Triennial Central Bank Survey published by the Swiss Bank for International Settlements in April 2007).

The following is a breakdown of the currency codes shown in the chart, along with their alternative codes often found in specialized literature, as well as symbols and synonyms (nicknames) in dealer slang. Synonyms are often used not in relation to the currency itself, but in relation to a pair of traded currencies, mainly the pair with the US dollar. For example, “cable” on Forex is often used in relation to the GBP/USD pair (English pound sterling is sold and bought for US dollars).

	USD	United States Dollar	$	green buck, buck	45%
	EUR	Euro	€		19%
	JPY (YEN)	Japanese Yen	¥	gopher, geppy	10%
	GBP (STG)	Great Britain Pound	£	cable	8%
	CHF (SWF, SFR)	Swiss Franc	Fr.	swissy	3%
	AUD	Australian Dollar	$	aussie	3%
	CAD	Canadian Dollar	C$	loonie, beaver	2%
	SEK	Swedish Krona	kr		1%
	HKD	Hong Kong Dollar	HK$		1%
	NOK	Norwegian Krone	kr		1%
	NZD	New Zealand Dollar	$	kiwi	1%
	MXN	Mexican Peso	Mex$		< 1%
	SGD	Singapore Dollar	S$		< 1%
	KRW	South Korean Won	₩		< 1%
	ZAR	South African Rand	R		< 1%
	DKK	Danish Krone	kr		< 1%
	RUB (RUR)	Russian Ruble	руб		< 1%

Unfortunately, the Russian ruble (RUB) is not a freely convertible currency at the moment, so it is not actively traded on Forex.