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Trends & Analysis
News

Crude oil spikes on US inventories report

News

Does Apple have more room to run?

News

Gold spikes to new highs on Fed remarks

News

GBP/USD price may correct lower

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Goldman Sachs’ stock surges on upbeat Q2

News

Caution ahead of Netflix’s earnings?

Trends & Analysis
News

Crude oil spikes on US inventories report

News

Does Apple have more room to run?

News

Gold spikes to new highs on Fed remarks

News

GBP/USD price may correct lower

News

Goldman Sachs’ stock surges on upbeat Q2

News

Caution ahead of Netflix’s earnings?

Reserve currency definition

A reserve currency is a currency used globally to facilitate trade, act as a stable store of value, and support the balance sheet of central banks. The dominant global reserve currency is the US Dollar, which accounts for a large portion of all foreign currency holdings. Reserve currencies are often accepted for international trade even by two third-party countries that do not accept the currency as legal tender.

 

The role of reserve currencies

There are hundreds of actively used currencies worldwide, but only a few are viable for use in international trade. This is for various reasons: the currencies of small nations are often highly volatile, illiquid and may be subject to state controls. Therefore, it is beneficial to use widely accepted currencies with a stable value to facilitate trade, and also to ensure central banks have access to a useable currency in the forex market. In most instances, this currency is the USD, although the EUR and CNH are also sometimes used in this manner.

 

Investing in reserve currencies

Reserve currencies are safe haven, ‘risk off’ assets used to protect value. Normally they can be expected to have a stable valuation, and perhaps to increase in times of market turmoil as investors rotate out of riskier plays. Reserve currencies such as the USD are highly liquid and can be traded freely at any time of day, due to their global usage.

 

Start trading with ADSS

ADSS offers a range of global markets for traders, with CFD opportunities in indices, commodities, forex, equities and more. We also feature tutorials, how-to guides, and weekly webinars to help you navigate the financial markets and find better trading opportunities. You can start trading and investing online by opening a live trading or demo trading account.

 

See all glossary trading terms


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Investing in CFDs involves a high degree of risk that you will lose your money due to the use of leverage, particularly in fast moving markets, where a relatively small movement in the price can lead to a proportionately larger movement in the value of your investment. This can result in loses that exceed the funds in your account. You should consider whether you understand how CFDs work and you should seek independent advice if necessary.

ADS Securities LLC (“ADSS”) is authorised and regulated by the Securities and Commodities Authority (“SCA”) in the United Arab Emirates as a trading broker for Over the Counter (“OTC”) Derivatives contracts and foreign exchange spot markets. ADSS is a limited liability company incorporated under United Arab Emirates law. The company is registered with the Department of Economic Development of Abu Dhabi (No. 1190047) and has its principal place of business at 8th Floor, CI Tower, Corniche Road, P.O. Box 93894, Abu Dhabi, United Arab Emirates.

The information presented is not directed at residents of any particular country outside the United Arab Emirates and is not intended for distribution to, or use by, any person in any country where the distribution or use is contrary to local law or regulation.

ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.