Top 5 assets to trade in Nigeria

We've collected information on 5 of the most popular and profitable instruments, along with some basic information about them that may come in handy. There is also plenty of information available online on each of them, so feel free to do further research.

1. EUR/USD

The Euro vs. US Dollar currency pair is the most traded pair in the Forex market. It includes the currencies of the world's two largest economies. Thanks to its high liquidity, it tends to be somewhat less volatile than other currency pairs. But you should keep in mind that even the most liquid instruments can become highly volatile under certain conditions.

The EUR/USD pair is influenced by political movements that affect either the euro or the dollar in relation to one another. For example, when the European Central Bank intervenes in the market in order to strengthen the euro, you can expect the EUR/USD to rise.

2. USD/JPY

The Japanese yen (JPY) is the official currency of Japan. It is now widely held as a reserve currency behind the USD, the euro, and the GBP. The Japanese yen can demonstrate a number of daily fluctuations, but the central bank of Japan frequently buys and sells large amounts of the currency to keep control of the exchange rates.

The Japanese government places a high emphasis on keeping the yen low to keep a competitive export market. If you hold US dollars, you can potentially create big profits by taking advantage of these daily fluctuations if you buy in at the right time.

3. USD/CAD

The values of CAD and the USD are closely related. Canada is America's fiscal neighbor and one of its most significant trading partners. Speaking of correlation, the Canadian dollar is also heavily impacted by commodity prices.

For example, fluctuations in oil prices can significantly affect the value of the Canadian dollar because Canada's economy relies heavily on crude oil exports. In 2016, oil prices dropped to their lowest in over a decade. During that time, the CAD also suffered, plummeting to 1.46 CAD against 1 USD. If you want to exchange USD for CAD, carefully monitor oil prices to determine the perfect time to buy.

4. Gold

Gold is one of the oldest precious metals and one of the most valuable commodities in the world. Due to its unique physical properties and applications, gold is in high demand in various industries (medical industry, dentistry, electronics, aerospace technology and even glass making). The biggest gold-producing countries are China, Australia, Canada and the biggest gold consumers are China and India.

Gold is considered a safe-haven asset i.e, it acts as a protection against any economic crisis. Gold is a highly liquid commodity. Now, what affects the demand for gold? When inflation strikes, the national currency depreciates. Therefore, traders tend to invest in gold to hedge against inflation. Besides inflation, gold prices are also driven by supply and demand, geopolitical events, as well as the US dollar. Gold is priced in dollars, so it plays a significant role in how attractive the commodity is to foreign inventors.

5. Crude Oil

Crude oil is one of the best commodities to trade. By refining crude oil, one can produce high-demand products such as gasoline, kerosene, diesel, etc. Crude oil prices are affected by political situations in the Middle East as this region is one of the world's largest oil suppliers.

Natural disasters like hurricanes that can potentially disrupt oil production can also be a huge driver of its cost.

Summing up

As you can see, apart from trading regular currency pairs, you can successfully trade commodities too. They have become an attractive investment option for investors. If you want to build a well-balanced investment portfolio, definitely consider this class of assets. There are different ways to invest in commodities, but commodity futures contracts are the most popular method.

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