
Dual Currency Service
A dual currency service is a forex trading service that allows an investor to speculate on exchange rate movement between two specific currencies through a fund or instrument. Dual currency service instruments typically involve currency pairs of major, liquid currencies, such as the U.S. dollar, British pound, Swiss franc, euro and Japanese yen. Generally, currencies that are traded in exchange for the U.S. dollar (USD) are called major currencies, while those currencies that are not associated with the USD are referred to as minor currencies. Often using major currency pairs, a dual currency service is intended for directional bets in exchange rate spreads and not on spot rates. In a currency pair, the value of two currencies, the base currency and the quote currency, are compared to each other.

What Is a Dual Currency Service?
A dual currency service is a forex trading service that allows an investor to speculate on exchange rate movement between two specific currencies through a fund or instrument.
A dual currency service typically requires the investor to make directional speculations between the currencies, such as speculating that the U.S. dollar will rise against the yen.



Understanding Dual Currency Services
Dual currency service instruments typically involve currency pairs of major, liquid currencies, such as the U.S. dollar, British pound, Swiss franc, euro and Japanese yen. In a currency pair, the value of two currencies, the base currency and the quote currency, are compared to each other. It looks at how much of the quote currency is required to buy one unit of the base currency. Currency pairs are traded in the foreign exchange market, or the forex market. The most traded currency pair in the world, and the most liquid one as well, is the euro against the U.S. dollar, which is denoted as EUR/USD.
Because a dual currency service is a directional service, investors are able to make generalized price bets as opposed to bets on the specific exchange rate spot prices.
Forex and Currency Pairs
The foreign exchange (FX) marke is where currencies are bought, sold, exchanged, and where they become the subject of speculation. It is the largest and most liquid financial market in the world.
All forex trades involve buying and selling of currency pairs, where one currency is sold and another is bought. Often, currency pairs are thought of as single units that can be bought or sold. The number of currency pairs that exist varies as currencies come in and out of circulation and existence.
When traders buy or sell currencies in the foreign exchange market, they are not trading actual physical currencies, but instead making a bet on the strength of the currency relative to another. If they are buying a currency, they are hoping its value will strengthen in relation to the currency in the pair that is sold in order to make a profit, whereas when they sell currencies they hope for the opposite.
Generally, currencies that are traded in exchange for the U.S. dollar (USD) are called major currencies, while those currencies that are not associated with the USD are referred to as minor currencies. They are not as liquid as major currencies. Some examples include EUR/GBP and EUR/CHF. When currency pairs include the currencies of emerging markets, they are referred to as exotic currencies pairs, an example of which would be USD/MUR. These currency pairs are not as liquid and have wider spreads.
Related terms:
Currency Pair
A currency pair is the quotation of one currency against another. read more
Currency Pair: EUR/USD (Euro/U.S. Dollar)
The Currency Pair EUR/USD is the abbreviation for the euro and U.S. dollar. read more
European Terms
European terms is a foreign exchange quotation convention where the quantity of a specific currency is quoted per one U.S. dollar. read more
Forex (FX) , Uses, & Examples
Forex (FX) is the market for trading international currencies. The name is a portmanteau of the words foreign and exchange. read more
Liquid Asset
A liquid asset is an asset that can easily be converted into cash within a short amount of time. read more
Quote Currency
A quote currency, commonly known as "counter currency," is the second currency in both a direct and indirect currency pair. read more
Reciprocal Currency
A reciprocal currency is a currency pair that involves the U.S. dollar (USD) without the USD serving as the base currency. read more