Generally, the most commonly traded currencies in forex rate market are those of countries with stable governments, reputable banks and low inflation. In practice this means that in excess of 80 per cent of transactions each day are in the major currencies, i.e. the US dollar, the Japanese Yen, the Euro, UK Sterling, the Swiss Franc and Canadian and Australian dollars. 

The currency exchange rates for these and all other currencies are driven by a number of factors and require investors to be armed with a good deal of insight, up to the minute currency trading news and an aptitude for crystal-ball gazing. 

While variables such as the global economy and political climate exert an influence, the main sways tend to be interest rates, inflation and political stability. Money markets are jumpy and this is why governments often trade in the Forex market in order to affect the value of their currencies. By buying up currency or alternatively upping the supply of their currency - in similar fashion to oil producers - governments can raise or lower the price of their currency. 

This kind of intervention tends to be a short-lived quick fix approach due to the sheer scale of the forex rate market. Highly volatile shifts in values simply cannot be sustained in the long term. 

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