In foreign exchange terminology, a currency is the primary unit of payment and hence the means by which trade occurs in a particular country. Physical currency can be made of either paper or coin, and it is usually issued by the country’s government to serve as money within its borders.
Although the Euro acts as the primary currency for several European countries within the European Union, most countries issue their own currency. The U.S. Dollar, the U.K.’s Pound Sterling and the Japanese Yen are examples of currencies. Furthermore, the currency of one country can be traded or exchange for the currency of another country, and this forms the basis of the foreign exchange market.