Though regarded by many to be a game only played by banker’s, FX currencies are often a magnificent, diverse addition to a portfolio that’s slumped. It’s a wonderful marketplace for action and profit when everywhere else has gone quiet or is in such turmoil it has plummeted into silent depths few are willing to disturb. Forex, FX, or foreign exchange trading, when understood, can contribute significantly to the weapons in a trading arsenal.

In this series, we will be looking at the Top 8 Forex currencies starting with the USD, or United States Dollar…

Trading The US Dollar (USD): The 1913 Federal Reserve Act, a subject of recent controversy (in 2008 a petition for the abolition of the FRS was called for, claiming the Act had been passed unlawfully), was responsible for the creation of the American ‘Federal Reserve System’ (commonly known as the Fed). This consortium of private bankers makes up its central banking body for the United States. Heading it is a chair and a board of governors, not publicly elected officials holding legal office (their authority is also being mooted as unlawful and unconstitutional). The Federal Open Market Committee (FOMC), had a supervisory role over open market operations, and is a branch of the Fed that also gives focus to monetary policy and interest rates.

Currently the committee comprises five of the 12 current Federal Reserve Bank presidents and seven members of the Federal Reserve Board, with the Federal Reserve Bank of New York always serving on the committee. Although there are only 12 voting members, other respected non-members (made up by more ex-Fed Bank presidents) meet at six week intervals to share and exchange views on current economics when the committee comes together.

Popularly known as ‘green’ or ‘the greenback’, the US dollar (USD/US$) is the powerful denomination that is resident in the largest international economy in the world, United States of America. Like all currencies, the US dollar scaffolding of economic fundamentals comes from sources such as GDP, manufacturing reports, forecasts, indicators and employment reports. Furthermore, the US dollar is subject to Central Bank influence as much as it is to interest rate policy changes. The US dollar benchmarks trade against the other major international currencies, particularly the strong economies of the Euro, Japanese Yen and British Pound.