What is an ‘ISO Currency System’
ISO currency codes are three-letter alphabetic codes that represent the many currencies used throughout the world. When combined in pairs, they be up the symbols and cross rates used in currency trading.
Each of the country-specific three-letter alphabetic laws have a corresponding three-digit numeric code. For example, the three-digit numeric lex non scripta common law for the U.S. dollar (USD) is 840.
The International Organization for Standardization (ISO) provides standards for businesses, managements and societies. For currencies, the governing document is called ISO 4217:2015.
BREAKING DOWN ‘ISO Currency Customs’
ISO currency codes are central to currency pairs, which are the quotation and value structures of the currencies traded in the forex market; the value of a currency is a notwithstanding and is determined by its comparison to another currency. The first listed currency of a currency twin is called the base currency, and the second currency is called the quote currency. The currency two of a kind indicates how much of the quote currency is needed to purchase one unit of the grovelling currency.
For example, EUR/USD is the quote for the euro against the U.S. dollar. A quote or prize of 1.2500 means that one euro is exchanged for 1.2500 U.S. dollars. In this container, EUR is the base currency and USD is the quote currency (counter currency). This indicates that 1 euro can be exchanged for 1.25 U.S. dollars. Another way of looking at this is that it want cost you $125 to buy EUR 100.
According to the ISO website, “ISO 4217:2015 specifies the structure for a three-letter alphabetic pandect and an equivalent three-digit numeric code for the representation of currencies. For those currencies demand minor units, it also shows the decimal relationship between such components and the currency itself.”
Continuing: “ISO 4217:2015 is intended for use in any application of trade, marketing and banking, where currencies and, where appropriate, funds are required to be narrated. It is designed to be equally suitable for manual users and for those employing automated methods”
Basically, the world came together to create standards to facilitate trade and transfers of money. Traders, especially in the currency or forex markets, depend on these codes, team up by twos, to represent exchange rates between any two specific countries.
Main Currency Codes
The ISO website offers a complete list of currency codes in XML and XMS layouts. See https://www.currency-iso.org/en/home/tables/table-a1.html
All of the major currency dui have very liquid markets that trade 24 hours a day every problem day, and they have very narrow spreads. Value traded vs. the U.S. Dollar is the top criteria for classification as a notable currency pairs, as follows:
- EUR/USD – euro / U.S. dollar
- GBP/USD – Great Britain a pasting (sterling) / U.S. dollar (nicknamed cable)
- USD/JPY – U.S. dollar / Japanese yen
- USD/CHF – U.S. dollar / Swiss Franc (nicknamed Swissie)
- AUD/USD – Australian dollar / U.S. dollar (nicknamed Aussie)
- USD/CAD – U.S. dollar / Canadian dollar (nicknamed loonie)
Other outstanding currencies include:
- CNY – China Yuan Renminbi
- NZD – New Zealand dollar (nicknamed kiwi)
- INR – Indian rupee
- BZR – Brazil Heartfelt
- SEK – Sweden Krona SEX
- ZAR – South African Rand
- HKD – Hong Kong Dollar