That is, you must know how two different currencies are traded against each other. The reason is simple: as you know, all currencies are traded in pairs, not in isolation. This may seem obvious, but it’s worth explaining why it’s important to know that a currency is strengthened or weakened against its peers. In essence, currency strength meters measure the strength of a country's currencies against its peers. Nowadays, they are used to help investors make decisions as to which currencies to buy or sell. Currency strength meter is a measure of a currency's strength against its peers.Īlthough strength meters have gained popularity over the years, they have been available since the early days of foreign exchange trading. More generally, a currency strength meter is a trading tool that measures a currency’s performance against a basket of other foreign currencies. A currency strength meter is a technical indicator used by traders to obtain information about the strength of an individual currency relative to its peers.
