The US dollar is the reserve currency of the world and as such, its fundamentals and technicals are paramount in any trade involving it. In the last 20 years, the world that was divided politically between the ideologies of democracy and communism has become one, with a few small exceptions. This brings everyone to a central place in today's financial world: currency markets. Many traders exclusively trade US dollar versus G-7 currencies, and by this not only give up many opportunities in other crosses, but limit their playing field. By trading a wide range of currency crosses, traders may be able not only to diversify within forex markets but also have an opportunity to establish positions that to some extent can offset each other. The pound sterling has an interesting relationship with the dollar and euro and its own unique fundamentals.
How to trade forex cross pairs Marek D Chelkowski Futures; Apr 2010; 39, 4; Docstoc pg. 48 Reproduced with permission of the c
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