Trading BRICS Currencies

Trading BRICS CurrenciesBy

www.TheForexNittyGritty.com

http://www.theforexnittygritty.com/

Economists have estimated that by 2050 the economies of Brazil,

Russia, India, China, and South Africa will surpass those of the G7

nations in gross domestic production.



Along the way the currencies of the so called BRICS nations will likely

prosper as well versus G7 currencies.



Trading BRICS currencies may well be profitable, both betting on a

slow and steady surge in value and trading BRICS currencies during

periods of volatility versus the current major currencies.



A viable strategy for foreign currency trading in the

years ahead may well be to focus on the economic shift of the BRICS

nations versus the G-7.


http://www.theforexnittygritty.com/forex/foreign-currency-trading


The G-7 nations currently account for just over fifty percent of global GDP. G-7 nations include Canada, France, Great Britain, Italy, Japan, the United States, and Germany.



The following are GDP numbers for the various nations from 2011.



G-7 Nations Current GDP = $33.2 Trillions

BRICs Nations Current GDP $14.2 Trillions



Mexico and South Korea, according to some, belong in the

BRICS group but most economists consider these nations more

economically advanced and closer to being on par with the G-7

nations.



Nations that may well enter the economic realm of the BRICS nations in the next few years

include Turkey, Indonesia, and Nigeria.



From the viewpoint of trading BRICS currencies all of these are nations and currencies to watch.



Which Currenciesto Trade



Let us make the general assumption that the BRICS nations

and others mentioned above will continue to prosper and come on

par with the current world economic leaders.



Over the long term it would seem logical to invest in these nations

and gain both as investments prosper and as their currencies

grow in value.



But, to make money trading Forex we need to trade currencies with

diverging valueswww.TheForexNittyGritty.com


Thus it might make more sense to trade G-7 currencies versus BRICS

currencies.



The G-7 currencies, plus Australia are the major Forex currencies

(Italy, France, and Germany use the Euro).



If you do so you will be trading a major versus a minor Forex currency

.


http://www.theforexnittygritty.com/forex/trading-a-major-versus-a-minor-forex-currency

http://www.theforexnittygritty.com/forex/trading-a-major-versus-a-minor-forex-currency


Although the situation may changes as the BRICS economies

grow there is still much larger trading volume when major

currencies are involved.



This provides a degree of stability to trading and makes technical

analysis more accurate.



Many times it is not possible to trade one minor currency versus

the other but rather one trades the first versus the US dollar and then

the US dollar versus the second currency.



BRICS Buying Dollars



When trading BRICS currencies versus the majors, especially the

dollar, remember that Japan, Taiwan, and China have made an

art form out of buying US dollars in order to keep the dollar strong and

their own currency relatively weaker.



These nations do this in order to preserve an advantage in exporting

products, especially to North America and Europe.



When trading BRICS currencies the trader must keep abreast of the

economic and central bank policies of the nations involved.



Doing so will allow the trader to benefit from the ups and downs of

these currencies as they steadily advance in value compared to the

current major currencies.



For more insights and useful information regarding Forex and

foreign currency trading, visit www.TheForexNittyGritty.com.


Trading BRICS Currencies

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