Essay: Selection of Currency Pairs

Sample Essay

The selection of currency pairs must factor in the market conditions. For this reason, traders must buy currencies that have high interest rates and sell that have low interest rate.

The economy will affect the stability of the currency pair, hence the pair selected must offer the trader maximum returns in the given market. In consideration of the current financial market, the commonly used currency pairs are the US dollar, Australian dollar, Canadian dollar and the Euro against the Japanese yen[1]. Other currency pairs include the British pound against the Japanese Yen. Taking this into consideration, the risks the trader incurs include a return from interest difference must be higher than the exchange rate[2]. The second risk involves the realisation of losses from unfavourable markets that create margin calls or a complete end of the trade, when substantial leverage is used. The third risk to the trader is the varying on their returns from the compounding of interests due to the market’s varying interest rate differences[3].

[1] Burnside et al., Returns to Currency, 5.

[2] Burnside et al., Returns to Currency, 5.

[3] Ibid,

Thank you for visiting and viewing our articles and sample papers. Kindly be informed that all these articles and sample papers are for marketing purposes only. The sole purpose of these articles and sample papers is just to provide our customers with an idea about our services before they place an order.

Kindly visit our order/inquiry page for further assistance.

Kindly order custom made Essays, Term Papers, Research Papers, Thesis, Dissertation, Assignment, Book Reports, Reviews, Presentations, Projects, Case Studies, Coursework, Homework, Creative Writing, Critical Thinking, on the topic by clicking on the order page.


Recent Posts

Maintaining Medical Records

Maintaining Medical Records requires the appropriate software and is essential both for the patients and…

4 months ago

Is Scientology a Religion?

Scientology is regarded the most notorious religious movement of the 20th century. The Church of…

5 months ago

Issues of Capital Punishment

Capital punishment is a contentious and controversial issue in today’s world. The main objective of…

5 months ago

Journalism Ethics and Standards

Journalism ethics and standards comprise are adhered to by journalists. This division of media ethics is commonly called by…

5 months ago

Essay: Shakespeare’s Side of the Story

Sample Essay For Shakespeare’s side of the story, facts were derived from the chronicle by…

5 months ago

Essay: Frankenstein’s Representations

Sample Essay Frankenstein’s representations in movies are however more distorted than the original owner’s intention.…

6 months ago