The U.S. dollar is considered the world's safe-haven security. Before the reversal of the gold standard in the U.S. in the early '70s, most of the world's currencies were pegged to the U.S. dollar. Since the dollar is the world's medium of exchange, foreign currencies are quoted in U.S. dollar terms.
There are four main currencies involved in foreign exchange market. These currencies are the U.S. dollar, the Japanese yen, the Swiss franc, and the British pound. When you read a currency quote, you'll often see the two currencies denoted side by side.For example, a quote that reads $$EURUSD 1.29, means that euros are being quoted in terms of U.S. dollars. The 1.29 figure is really a ratio, 1.29:1. This ratio means that one U.S. dollar could buy 1.29 euros. This is good news for U.S. residents about to head over to Europe to do some traveling. If the ratio is higher than one and is quoted in terms of U.S. dollars, it indicates that one dollar could buy more than one denomination of the foreign currency.Investors that are interested in trading currencies can easily find currency exchange rates online. Several financial firms provide easy access to currency information for investors. Currency information can also be found in newspapers, although it is often much harder to read. If you're interested in looking up some currency quotes, check out online currency calculators or the websites of trading professionals.
