Importance of Currency in Global Market

The exchange of goods and services has transformed from the barter system into a standard form of exchange of goods called currency. In old times, there was nothing like currency. Instead, people exchanged goods to buy goods. Today, every nation in the world has a currency which plays a crucial role for the purpose of exchange of goods on the local and international levels.

The value of currency defines the state of the economy on global markets and the power of the country as well. Today, the most acceptable and powerful currencies in the world are USD, EURO, Swiss Franc, Yen and British Pound. On international levels, the nature of foreign exchanges is significantly defined by the power of currency and the exchange rates.

Trade among different countries is impossible without currencies in the form of acceptable money and assets. The money system provides a universal store for the value that can be readily used. The relatively small size of coins and money makes it easier to sell and buy goods in a fair way.

The currency of a particular country gives it identification in global markets. The value of the currency is defined in comparison to other currencies. The trade between different countries has become possible because of the currency and it also has given rise to related concepts like foreign exchange rates that have a great impact on international trade.