Forex trading has become quite popular in Uganda. Most of the progress towards adopting online trading can be attributed to easy internet access and smartphones becoming more affordable.
As a forex trader in Uganda, knowing which currencies dominate the market is essential for building a winning trading strategy. Here, we explore the top traded currencies in Uganda while focusing on what drives their popularity.
The US Dollar (USD)
What is the most traded currency? The US dollar is the most traded currency in the world, and it also dominates the forex market in Uganda. Most globally traded commodities and stocks are often priced in USD. In addition, most Ugandans working for foreign entities, including those living in the US, get paid in USD.
USD pairs offer more liquidity and lower spreads. In addition, the volatility patterns are easy to predict, making them attractive to newbie forex traders.
The Euro (EUR)
Uganda has strong trading and economic partnerships with EU countries. This has a hand in promoting the demand for EUR, one of the top 3 traded currencies globally, in both commercial and forex markets. Forex traders in Uganda also gravitate towards EUR pairs because of strong liquidity.
The EUR/USD is one of the most traded currency pairs in Uganda’s forex market. This is partly because of two main reasons. One, it combines two of the greatest and most powerful currencies in the world. Two, it offers tight spreads, and there is always high activity due to the volume of trades between the US and EU nations.
The British Pound (GBP)
The UK remains an important ally to Uganda. This is evident in the significant trade between the nations. Accordingly, the British pound is among the most popular currency options for investors in Uganda. For forex traders, GBP pairs are an attractive option because they have higher volatility compared to USD and EUR pairs.
GBP/USD and GBP/JPY are more volatile, which means more trading opportunities for day traders in Uganda. The price swings, even though they present a high risk, are ideal for traders who prefer aggressive trading plans.
What Drives Currency Popularity Among Online Ugandan Traders?
§ Broker Support
Most international and local brokers in Uganda offer extensive USD, EUR, GBP, and JPY pairs with favorable trading conditions. In addition, many payment options in Uganda provide foreign exchange services, allowing traders to deposit and withdraw funds with ease.
§ Liquidity
The USD, EUR, JPY, and GBP are the most traded currencies in the world in forex markets. High-liquidity currency pairs reduce slippage, have lower spreads, and offer better execution. These consistent and largely predictable patterns are favorable for traders in Uganda.
§ Volatility
The GBP attracts traders seeking to profit from the frequent price swings and intraday trading. Considering that many forex traders in Uganda prefer trading during the day, GBP pairs offer the best opportunities for traders who like taking risks.
Wrapping up
Forex trading is quite popular in Uganda. Understanding the most traded currencies in the markets gives traders an edge. Ugandan traders can manage risks effectively and capitalize on global economic trends by focusing on the top 3 traded currencies.
