The Major Currencies in the World？？The currencies ...

The Major Currencies in the World

  The currencies of the world's major economies have names and backgrounds that are as diverse as the countries themselves.

  The dollar is the name for the currency used in many countries including the United States , Canada, and Australia. It gets its name from a silver coin minted during the Middle Ages in a small valley, or "Thal" , in Bohemia called Joachimathal. Just a sausage Frankfurt called "Joachimsthaler" or simply " Thaler" , and came to be called " dollar" in English.

  The pound, used in Britain, Egypt, and Lebanon among others, refers to the weight used in determining the value of coins, based on precious metals such as gold or sterling. The penny has the same origin as the word pawn,found in terms such as pawn shop , and originally meant "to pledge". A penny , like any currency , is a " pledge " of value.

  In Italy and Turkey , the currency is called lira. The word is based on the Latin lira, meaning "pound" and once again referring to the weight of the original coins.

  In Spanish , the word meaning " weight" , peso is used to describe the coins that were based on a certain weight of gold or silver. Originally,there were gold coins called peso de oro and silver ones called peso de plata. In Spain , the currency is called peseta, meaning "small peso". The word peso is used to describe the currency in many Spanish-speaking countries in Latin America.

  In Denmark, Norway, and Sweden, the word for crown-krone in Denmark and Norway,krona in Sweden-is used to describe the currency that was originally minted by the king and queen,with royal crowns stamped on the earlier coins. Today,the crown has been replaced by other symbols , but the name remams.

  The franc,used in France, Switzerland, and other countries and territories,is based on the early coins used in France, that bore the Latin inscription franconium rex , meaning "king of the Franks". The com, as well as the country, took its name from one of the original tribes that settled in the area, the Franks.

  The German mark and Finnish markka derive their name from the small marks that were cut into coins to indicate their precious metal content. The German mark, deutsche mark in German ,is often called by its shortened name , D-mark.

  The ancient Chinese word yuan meant "round", or "round thing". The name of the Japanese currency, the yen, and the name of the Chinese currency, the yuan , both derived from the old Chinese word,refer to the round shape of the original coins.

  Problem may arise when using the plural forms of these currencies. Most take the English plural "s", for example , pounds , dollars , francs , Deutschmarks , etc. However , some are invariable: yuan, yen, baht, and rand. Others keep the plural form of the language spoken in the country of origin: lira-lire , krone-kroner, krona-kronor , markka-markkaa , etc.

  Currencies are said to be convertible or invertible. Semi-convertible currencies can only be bought or sold through a country's central bank for documented commercial transactions. The exchange rates are fixed. Semi-convertible currencies are typical of third world countries.

  A hard currency is one which is strong and unlikely to fall in value. A soft currency is one from a country with a week balance of payments and for which there is little demand.

  Questions for reading :

The equationrelates the values of two linked currencies, where R is the value in dollars of one currency and S is the value in dollars of the other currency. Which of the following equations can be used to convert dollar values from the R currency to the S currency?

A．

B．

C．

D．

E．

France is one of the countries with freely ( ) currencies.法国是货币可自由兑换的国家之一。

A、conversation

B、converse

C、convertible

D、command

欧洲货币(Eurocurrencies)

The author believes that having a large number of currencies in circulation

A．leads to an unstable money supply

B．reduces the efficiency of the international economy

C．makes international travel more complex

D．requires the creation of a central monetary authority

Which of the following is not true? ______.

A．The British Pound is the base currency against all other global currencies.

B．In the AUD/USD currency pair, the base and quote currencies are respectively AUD and USD.

C．When an investor buys 20 000 EUR/USD, he is said to be buying EUR20 000 and selling the equivalent amount of USD.

D．None of the above.

The two most dominant currencies are______．

What does the author imply by saying "currencies dont turn on a dime"(Para. 7)?

A．The dollar"s value will not increase in the short term.

B．The value of a dollar will not be reduced to a dime.

C．The dollar"s value will drop, but within a small margin.

D．Few Americans will change dollars into other currencies.

Exchange Rates：A Brief History of Exchange Rates

For centuries，the currencies of the world were backed by gold．That is，a piece of paper currency issued by any world government represented a real amount of gold held in a vault by that government．In the 1930s，the U.S.set the value of the dollar at 8 single，unchanging level：l ounce of gold was worth $35．After World War II，other countries based the value of their currencies on the U.S.dollar．Since everyone knew how much gold a U.S.dollar was worth，then the value of any other currency against the dollar could be based on its value in gold．A currency worth twice as much gold as a U.S.dollar was，therefore，also worth two U.S.dollars．

Unfortunately，the real world of economics outpaced this system．The U.S.dollar suffered from inflation(its value relative to the goods it could purchase decreased)，while other currencies became more valuable and more stable．Finally，in 1971，the U.S.took away the gold standard altogether．This meant that the dollar no longer represented an actual amount of a precious substance-market forces alone determined its value．

Today，the U.S.dollar still dominates many financial markets．In fact，exchange rates are often expressed in terms of U.S.dollars．Currently，the U.S.dollar and the euro account for approximately 50 percent of all currency exchange transactions in the world．Adding British pounds，Canadian dollars，Australian dollars，and Japanese yen to the list accounts for over 80 percent of currency exchanges altogether．

Methods of Exchange：the Floating Exchange Rate

There are two main systems used to determine a currency's exchange rate：floating currency and pegged currency．The market determines a floating exchange rate．In other words，a currency is worth whatever buyers are willing to pay for it．This is determined by supply and demand，which is in turn driven by foreign investment，import/export ratios，inflation，and a host of other economic factors．

Generally，countries with mature，stable economic markets will use a floating system．Virtually every major nation uses this system，including the U.S.，Canada and Great Britain．Floating exchange rates are considered more efficient，because the market will automatically correct the rate to reflect inflation and other economic forces．

The floating system isn't perfect，though．If a country's economy suffers from instability，a floating system will discourage investment．Investors could fall victim to wild swings in the exchange rates，as well as disastrous inflation．

Methods of Exchange：the Pegged Exchange Rate

A pegged，or fixed system，is one in which the exchange rate is set and artificially maintained by the government．The rate will be pegged to some other country's dollar，usually the U.S.dollar．The rate will not fluctuate from day to day．

A government has to work to keep their pegged rate stable．Their national bank must hold large reserves of foreign currency to mitigate changes in supply and demand．If a sudden demand for a currency was to drive up the exchange rate，the national bank would have to release enough of that currency into the market to meet the demand．They can also buy up currency if low demand is lowering exchange rates．

Countries that have immature，potentially unstable economies usually use a pegged system．Developing nations can use this system to prevent out-of-control inflation．The system can backfire，however，if the real world market value of the currency is not reflected by the pegged rate．In that case，a black market may spring up，where the currency will be traded at its market value，disregarding the government's peg．

When people realize that their currency isn’t worth as much as the pegged rate indicates，they may rush to exchange their money for other，more stable currencies．This can lead to economic disaster，since the sudden flood of cur

A．After World War I

B．After World Wat II

C．In 1930s

D．In 1960s

The currencies of the countries of the Euroland were phasing out in 200