Forex and Currency

In the previous lesson, we talked about holding US dollars and selling them when the dollar rate goes up. In this example, two currencies were used, US dollars and the Srilankan rupees. In the forex market, the US dollar is known as the USD. Also, Srilankan Rupees know as LKR.

From here on, I call the currency their short names.
The main thing you need to understand here is that in a Forex trade, two currencies are always used. And the rate is shown as follows.

USD / LKR = 170.87

This means to buy USD 1 you need 170.87 Srilankan rupees.

Now that if you know the rates of both currencies, you can be able to make any calculation between them. Consider an example.


USD / LKR = 109.15

• How many dollars can you get for 250000 LKR?

Make sure you slove this calculation before looking at the answer.



USD Amount = 250000 / 109.15 = 2290.43 $

• Now think how much rupees you can buy for $ 1340?

LKR Number = 1340 * 109.15 = LKR 146261


I hope you are clear on this.

I have explained the above calculations using Sri Lankan Rupees to clearly show you the calculations that are taking place here because there is a huge difference between the Dollar and the Sri Lankan rupees.
But in the Forex market, you won't see Srilankan rupees.


The following are the types of currency units to be traded in the Forex market.

1. United State Dollar
2. Euro (used by European Union member countries)
3. Great Britain Pound
4. Switzerland Franc
5. Canadian Dollar
6. Australian Dollar
7. New Zealand Dollar

These currencies are known by many different names.

Country	Currency unit	Forex symbol	Other names
United States of America	Dollar	USD	Buck
Great Britain	Pound	GBP	Cable
European Union	Euro	EUR	Fiber
Japan	Yen	JPY	Yen
Switzerland	Franc	CHF	Swissy
Canada	Dollar	CAD	Loonie
Australia	Dollar	AUD	Aussie
New Zealand	Dollar	NZD	Kiwi

One of the most important things in the above table is the Forex symbol. We need to know these short names and symbols. Because in the future we have to look at Forex news, Most of Forex news issuing companies are using the short name(other names).

For example, a news company might say that the price of Fiber is going up, then you should know that the euro (EUR) currency is going up.

Now that you know how to trade, you have to be a little more patient. If you go into the Forex market without this basic theory, you can't do anything.

Next, we will look at the major currency pairs.

Pair	Country	Short name
EUR/USD	European Union/United States	Euro Dollar
USD/JPY	United States/Japan	Dollar Yen
GBP/USD	Great Britain/United States	Pound Dollar
USD/CHF	United States/Switzerland	Dollar Swissy ට ෝ Dollar Franc
USD/CAD	United States/Canada	Dollar Loonie
AUD/USD	United States/Australia	Aussie Dollar
NZD/USD	New Zealand/United States	Kiwi Dollar

USD is the most commonly used currency in the Forex market

In addition to these currency pairs we talked about above, There are also other currency pairs in the forex market that we call minor currency pairs. (Major cross currency pairs)

Euro Crosses

Pair	Country	Other names
EUR/CHF	European Union/Switzerland	Euro Swissy ට ෝ Euro Franc
EUR/GBP	European Union/Great Britain	Euro Pound
EUR/CAD	European Union/Canada	Euro Loonie
EUR/AUD	European Union/Australia	Euro Aussie
EUR/NZD	European Union/New Zealand	Euro Kiwi

Yen Crosses

Pair	Countries	Other names
EUR/JPY	European Union/Japan	Euro Yen
GBP/JPY	Great Britain/Japan	Pound Yen
CHF/JPY	Switzerland/Japan	Swissy Yen
CAD/JPY	Canada/Japan	Loonie Yen
AUD/JPY	Australia/Japan	Aussie Yen
NZD/JPY	New Zealand/Japan	Kiwi Yen

Pound Crosses

Pair	Countries	Other names
GBP/CHF	Great Britain/Switzerland	Pound Swissy
GBP/AUD	Great Britain/Australia	Pound Aussies
GBP/CAD	Great Britain/Canada	Pound Loonie
GBP/NZD	Great Britain/New Zealand	Pound Kiwi

Other Crosses

Pair	Countries	Other names
AUD/CHF	Australia/Switzerland	Aussie Swissy
AUD/CAD	Australia/Canada	Aussie Loonie
AUD/NZD	Australia/New Zealand	Aussie Kiwi
CAD/CHF	Canada/Switzerland	Loonie Swissy
NZD/CHF	New Zealand/Switzerland	Kiwi Swissy
NZD/CAD	New Zealand/Canada	Kiwi Loonie

In addition to the currency pairs mentioned above, there are also exotic currency pairs.
Exotic pairs are less likely to be dealt with as an apprentice.

Pair	Countries	Other names
USD/HKD	United States/Hong Kong	-
USD/SGD	United States/Singapore	-
USD/ZAR	United States/South Africa	Dollar Rand
USD/MXN	United States/Mexico	Dollar Peso
USD/DKK	United States/Denmark	Dollar Krone
USD/SEK	United States/Sweden	-
USD/NOK	United States/Norway	-

You don't need to remember all of the above. An apprentice only needs to remember the major currency table.

See you again in the next lesson.