What are the characteristics of direct foreign exchange trading?

There are US dollars in foreign exchange direct trading. Do you know the characteristics of direct foreign exchange trading? Today, I'd like to take you to understand the characteristics of foreign exchange direct trading.


Characteristics of foreign exchange direct currency pairs
1. The difficulty of market analysis is small
Because the U.S. dollar is the basic settlement currency in the foreign exchange market, investors only need to analyze a single currency in the direct trading, but if it is a cross trading, the two currency pairs need to be analyzed separately and then integrated, which is more complex

2. The risk is relatively small
The possibility of unilateral foreign exchange market is high. Compared with the cross market, the volatility of foreign exchange direct currency pair is smaller, the risk is much lower than that of cross market, and it is easy to appear unilateral market.
(unilateral market: unilateral rise or unilateral decline. Small shocks are inevitable, but the big trend is always in one direction. )

3
The interference of political and other factors in foreign exchange direct trading is lower than that in cross trading. For example, if the Bank of Japan frequently intervenes in the yen exchange rate, investors can find that when the central bank intervenes, the volatility of the cross market is significantly higher than that of the direct market.

4. Large trading volume and good liquidity
Hot currency pair characteristics
EUR / USD
And the overall trading volume of the euro is relatively stable. To some extent, the relationship between the euro and the US dollar is opposite. The euro can be regarded as the rival currency of the US dollar in the direct trading of foreign exchange. We investors can also judge the strength of the US dollar by referring to the euro.

GBP / USD
The pound is more volatile than the euro. Britain is closely related to the economy and politics of the euro area, and Britain was an important member of the European Union, so the economic and political changes in the European Union have a great impact on the pound.

AUD / USD
As we mentioned earlier, the Australian dollar is a typical commodity currency. The characteristics of commodity currency are: the exchange rate of high interest rate currency changes in the same direction with the price of certain commodities, such as crude oil and gold, because Australia has an absolute advantage in the international trade of coal, iron ore, copper, aluminum, wool and other industrial products and cotton textiles. As a result, the Australian dollar fluctuates with the prices of these commodities. Moreover, the Australian dollar is a high interest rate currency. The change of interest rate prospect and treasury bond yield reflecting interest rate prospect has great influence on it.

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