16.What are currency codes and symbols in Forex?
ISO codes for currencies
In the forex market, each currency code is uniformly represented by three English letters. Using the ISO 4217 set of codes, ISO 4217, an international standard developed by the International Organization for Standardization to denote currency names.
At the international trading level, ISO codes are used by people for the convenience of:
- Quotation
- Reading
- Communication
Banks and corporations around the world also use currency codes, and it’s not uncommon to see banks publish each currency exchange rate by using the currency code rather than any translated name or currency symbol.
Currency code rules
According to the rules of ISO 4217 code, the first two letters of currency code are actually the country code of ISO 3166-1, and the third is usually the first letter of a currency name. In the case of GBP, the GBP consists of the code for the United Kingdom, “GB”, and the first letter of Pound “P” . Similarly, USD is composed of the country code for the United States, “US” and “D” for Dollar, and CNY is composed of the country code for China “CN” and “Y” for Yuan. Less clear is the currency code CHF, which combines the Swiss country code “CH” and “F“ for Franc.
Points to note in currency codes
The ISO 4217 forex currency code can be changed, for example when a country issues new currency, carries out currency reforms or changes currency units. The Russian ruble was once changed from RUR to RUB.
In addition, the code also includes non-currency classes, beginning with X.
The most commonly seen are the precious metals like:
- gold (XAU)
- silver (XAG)
- palladium (XPD)
- and platinum (XPT)
All are actually made up of X and the “periodic table” names of these metals. XDR stands for IMF’s Special Drawing Rights (SDR).
Unofficial ISO Forex Currency Codes
It should be noted that there are some commonly used codes in the financial market, but they are not official ISO codes, such as:
- RMB (an abbreviation of Renminbi)
- CNH (Offshore RMB)
- BTC and XBT (Bitcoin)
Next Articles: 17. What are the Major Currencies?
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