Forex Currency Pairs: Major, Minor, and Exotics Explained

There is no right or wrong way of investing YOUR money in forex trading for beginners. You may even want to take note of forex pairs that correlate as this could also give you an added benefit. The GBP/USD is one of the most traded pairs thanks to the volume of business between the United States and the United Kingdom. It covers the major pairs of forex including USD/JPY, EUR/USD, USD/CHF, GBP/USD, AUD/USD, NZD/USD, EUR/CAD, GBP/CAD, and many more. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you.

list of currency pairs

It holds the euro as the base currency and the US dollar as the quote currency, so the price represents how many dollars you would need to spend in order to buy one euro. For example, if the price quoted for EUR/USD was 1.2500, you would have to spend $1.25 in order to buy €1. Traders on the Forex market inevitably come across currencies called “the major currencies”. This term indicates the most frequently traded currencies worldwide, and the list includes Euro , Dollar , Japanese Yen , British Pound , Australian Dollar typically), and the Swiss franc . Among the seven major currency pairs, the bulk of the transaction is usually within thesetop four, so these are usually the most liquid currency pairs there is out there. As the name implies, the foreign exchange market is all about exchanging currencies.

Contemporarily, the franc operates under a floating exchange rate – but this has not affected its reputation as one of the most stable currencies on the market. The yen is often used as one half of a carry trade, which is where a trader borrows money in a country that has low interest rates and invests in a country that has higher ones. Additionally, the yen is widely recognized as a ‘safe haven’, which can see it rise in times of economic uncertainty. This also leads the value of the USD/JPY pair to be correlated with the USD/CHF pair – because CHF is also seen as a safe haven, which is explained in section four.

WHAT PAIR CORRELATES WITH GBPJPY?

Forecasting for the EUR/GBP pair can prove difficult due to the close connection between the two economies. In particular, the name “sterling” comes from when the pound sterling had a value equal to one pound of sterling silver. Note that correlation among currencies could change in the future. And abilities along with your goals in order to decide on the moves that are most appropriate for you. Just because someone makes a nice living off of one pair, it’s not a given that that pair will fit into your plan. It’s easy to fund your account using one of the following payment methods.

And the currencies involved are different, which means different countries, central banks, and monetary policies. Forex markets are used to trade exchange rates between two or more national currencies. With this comprehensive list of 28 major forex pairs, you’ll know exactly which pairs to watch, trade and invest in. The EURUSD is the most traded currency pair due to its widened appeal with the EUR and USD. As the world’s second biggest currency, the euro is another key pairing with the Japanese yen. It is heavily influenced by the volume of JPY carry trades, as well as market sentiment.

In this example, the base currency is Euro and the counter currency which is measured against it is the USD. With our spreads and fast trading speeds, capitalize on exciting forex opportunities with OANDA. Trading Globally recognised broker with experience in FX trading services dating back to 1996.MarketPulse Daily trading news from our team of award-winning currency analysts.

Currency pairs are two currencies with exchange rates coupled for trading in the foreign exchange market. Even though it is a 24-hour market, 5 days a week, it is usually better to trade currency pairs in your time zone – this is due to liquidity and cheaper pricing again. Interest rates – central banks are responsible for preserving monetary and financial stability. In that case, demand for its country’s currency increases as investors and traders crave that higher yield, which, in turn, strengthens that currency by comparison to others. Previously, currencies had to be exchanged for US dollars before they could be exchanged for other currencies. The most popular cross pairs are EUR/GBP, EUR/JPY, and EUR/CHF.

What are forex majors and minors?

For those who have always traded the majors and crosses, the ability to view historical data is something you’ve come to expect. At this point, you should have a firm understanding of what a currency pair is as well as the dynamics of buying and selling. One area that often confuses traders is the idea of buying and selling currencies. So to save you from making some of those same mistakes, I’ve put together a crazy-detailed lesson of everything you could want to know about Forex currency pairs. Hypothetically, we can assume that the SZL/VUV (the Eswatini Lilangeni/the Vanuatu Vatu) pair may be the world’s least traded.

The Most Traded Currency Pairs in Forex (2022 Edition)

However, if you trade the exotics listed above, you may not have that luxury. But before you rush off to add this basket of currencies to your trading platform, there are a few things you should know. In other words, all minors are crosses, but not all crosses are minors. The majors are not the end all be all when it comes to trading Forex. Remember that a currency’s value depends on the currency sitting next to it.

Furthermore, each currency pair consists of a base currency that appears before the slash and a counter currency or quote currency that appears after the slash in the common market shorthand. The exact number is difficult to come by as some exotic pairs come and go each year. A currency pair is a pairing of currencies where the value of one is relative to the other.

The Most Commonly Traded Currency Pairs in the Forex Market by Volume

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But there are negatively correlated pairs too, which move in opposite directions to each other. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Investopedia does not include all offers available in the marketplace. Our aim is to make our content provide you with a positive ROI from the get-go, without handing over any money for another overpriced course ever again. We are sharing premium-grade trading knowledge to help you unlock your trading potential for free.

We can also say the same for hundreds of other extremely exotic pairs. However, it’s impossible to determine exactly which one is traded the least. Each line on the chart represents the activity of a specific currency pair, i.e., its volatility in pips during the day. The pairs were selected to better visually demonstrate the influence of a region on the “tradability” of a pair. Since more people are interested in an asset, the easier it is to buy and sell. So when you’re trading with correlations, make sure you are on the same timeframe for both pairs and that you have the latest correlation data.

Conclusion: The Complete 28 Major Forex Pairs List

These are the possible outcomes of high trading volumes and how they might affect major currency pairs. There are also currency pairs that do not trade against the US dollar, which have the namecross-currency pairs. Common cross currency pairs involve the euro and the Japanese yen. The majors are the most commonly traded currency pairs globally.

Slava Loza Forex Trader & Analyst More than 50% of trades in the Forex market somehow involve the US dollar. And because it positively correlates with the EURJPY, your technical analysis becomes a little easier https://forexarena.net/ for EURJPY. This is because you know what to expect, and you only need the analysis of the EURJPY to confirm that of the EURUSD. We say these are positively correlated because they move in the same direction.

This strategy can only be applied for currency pairs that move in the same direction. This page contains the full list of all forex pairs available on our trading platform. If you’re ready to start trading currency instruments with OANDA, open an account with us in minutes or try our demo account to see how forex trading can work for you. If you’re new to forex trading, choose liquid currency pairs like the EUR/USD or the USD/JPY. Then analyze the fundamentals and the technicals until you are familiar with what moves the currency pairs.

Important economic data that influences currency rates include CPI data, Nonfarm payrolls , gross domestic product , retails sales, purchasing managers index and others. Some traders believe EUR/JPY is easier to forecast larger trends than USD/JPY because the US dollar and the Japanese Yen are both seen as safe-haven currencies. Those new to trading forex often ask seasoned traders what the best forex pairs to trade are.

The USD/JPY is also traded in extremely high volumes which leads to low bid-ask spreads and lots of liquidity. The Yen is also known as a safe-haven currency amongst traders. The EUR/USD (Euro/US Dollar) nicknamed ‘Fiber’ is the world’s most traded currency pair commanding 23% of FX transactions in 2016.

GBP/USD has the pound as the base currency and the US dollar as the quote currency, meaning it shows how many dollars you would need to spend in order to buy one pound. GBP/USD is colloquially called ‘cable’ on account of the deep-sea cables that used to transfer price information between London and New York. But, this does not mean that there is no volatility in this pair – and there is still an opportunity for traders to realize a profit.