Forex Advice – Pegging, and Forex

Forex Advice – Pegging, and Forex

Our our Forex advice of the day, we are going to talk about pegging. We will talk first about what pegging actually is, and how it relates to Forex. For beginner traders, it would be a great definition to know and to have in your bank of knowledge.

Pegging, as it relates to Forex is to relate, or “peg” one underlying currency to a common, more well known currency. This happens a lot with US dollar, as it is a very well liked currency and trusted. For a lot of currencies, pegging their worth to the dollar helps give investors a sense of relief and trust.

In the early 1800′s the US dollar was pegged to the British pound, which could be argued as the first formation of current forex practices.

Pegging is a fairly common term, and although it is not always pegged to currency there are other means. Pegging currencies to precious metals such as gold and silver are also common practice. Having the relation to gold and silver in relation to currency has been a well discussed topic, and it has been practiced for hundreds of years. The Gold Standard has roots dating back to pegging currency to precious metals. Some of our forex advice in the past has talked about the Gold Standard, and the roots that forex trading has with it. An example of one our articles : http://www.wikirote.org/forex-blog-gold-theory/

Although pegging is not exactlu a trick, or tip to trade forex, forex advice doesn’t always have to be that way! Currency pegging is a great history point in time for modern forex trading.

For more of our forex advice, please check out some of the links below. We update our site multiple times a week!

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