Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Hard Currency

What it is:

Hard currency is currency that has been adopted as an acceptable payment method in multiple countries.

How it works (Example):

Hard currencies are generally issued by developed countries that have a strong industrial economy accompanied by a stable government. The most common hard currencies include the U.K. pound sterling (GBP), the euro (EUR) and U.S. dollar (USD).

Why it Matters:

Hard currencies display high stability and typically experience only minor short-term fluctuations in the foreign exchange market. Hard currencies are frequently used to denominate commodities and serve as a benchmark for foreign exchange markets. As a result, instability in hard currencies can lead to a loss in confidence with worldwide effect on markets.