Let's take a closer look at how market participants refer to different currencies and currency pairs in the FX markets. First, let's start with ISO codes. ISO stands for the International Organization for Standardization, which develops globally recognized standards for various industries.
In the case of currencies, ISO codes are three letter alphabetic symbols that denote different currencies used globally.
These codes are essential in ensuring consistency and clarity in financial transactions across borders. On the left side of the screen, you can see examples of some major ISO currency codes. For instance, USD stands for the US Dollar. EUR is the code for the Euro. JPY represents the Japanese Yen. Other key currencies include GBP for the British Pound, CHF for the Swiss Franc, AUD for the Australian Dollar and more. While there are many ISO codes for currency worldwide, this selection includes some of the most widely traded and recognized currencies in global financial markets. Familiarity with these is particularly important for market participants given their prominence in international trade and investments. Moving on in FX markets, it's common to hear currency pairs referred to by their nicknames. These nicknames make communication more concise and are often rooted in history or cultural references.
Let's walk through some examples on the right side of the screen.
Australian Dollar, US Dollar is called the Aussie. The term is a widely recognized nickname for the Australian Dollar and reflects its strong association with Australia as a nation. Much like how Australians colloquially refer to themselves as Aussies. This informal shorthand has become a staple in FX trading. British Pound, US Dollar is known as Cable.
This term dates back to the 19th century when the exchange rate between the British Pound and the US Dollar was transmitted across the Atlantic by an undersea telegraph cable. New Zealand Dollar, US Dollar is called the Kiwi. This name is inspired by New Zealand's National Bird. The Kiwi, which is a prominent cultural symbol. US Dollar, Canadian Dollar, is referred to as the Loonie. The Canadian Dollar gets this nickname from the image of the loon. A bird featured on Canada's $1 coin.
US Dollar, Swiss Franc is known as the Swissie. This nickname is simply a shorthand for the Swiss Franc reflecting its association with Switzerland.
