What Are the Most Commonly Traded Currency Pairs?

Product Information

Get tight spreads, no hidden fees and access to 12,000 instruments. To date, there are about 180 different currency names in the world. So, the number of possible currency pair combinations is 16,110. Slava Loza Forex Trader & Analyst More than 50% of trades in the Forex market somehow involve the US dollar. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.

NSE has introduced both futures and options on these international currencies. I think it will be a while for the options will pick up steam; however, I think the near month futures will attract traders on an immediate basis. When you see a currency pair – say EUR/USD, the first currency is called the Base Currency and the 2nd is called the Quote Currency, and the currency pair is always quoted in the quote currency. The National avatrade review Stock Exchange, under the full regulatory framework, has finally allowed cross-currency futures and options to be traded on the exchanges. There are several other factors based on which USDINR has found its way to most actively traded pair on the exchange. Visit our currency pair pages for more information on underlying influencers, spreads, charts, research and more – or open a Demo account to see for yourself firsthand.

Template:Most traded currencies

They include currencies from the world’s largest and most stable economies – some popular pairs include EUR/USD, GBP/USD and USD/JPY. Major pairs are popular among beginner and expert traders due to the high liquidity and low spreads. For instance, a short-term trader will focus on the most traded currency pairs with the tightest bid/ask spread. The Japanese Yen is the third most traded currency globally and a popular reserve currency. The population of Japan is around 40% of the US, its economy is relatively large. The Yen is seen as an ultimate safe-haven currency in times of global stresses.

While there are EIGHT major currencies, there are only SEVEN major currency pairs. 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. The value of the Australian dollar is entwined with the value of its exports as raw materials such as iron and coal account for a significant amount of the country’s GDP. With AUD reliant on these commodities, trading AUD can be profitable when the value of these goods is up as it strengthens the currency against the dollar.

The exchange rate of EUR/USD is determined by a number of factors, with one of the largest being the interest rates set by the European Central Bank and the US Federal Reserve . The currency with the higher interest rates will see an increase in demand because higher interest rates give a better return on an initial investment. Liquidity is high in EUR/USD transactions due to the high daily volume, which generally results in tight spreads. Liquidity and tight spreads are enticing as large trades can be made without causing major impacts on the market.

Traders prefer such currency pairs because their liquidity and trading conditions are better than those of other pairs. The total amount of currency trading involving these 18 pairs represents the majority best day trading strategy forex of the trading volume in the FX market. This manageable number of choices makes trading a lot less complicated compared to dealing with equities, which has thousands of possible choices to choose from.

Discover the range of markets you can spread bet on – and learn how they work – with IG Academy’s online course.

The majors are the cheapest to trade due to the sheer volume traded each day. To find out what you should trade is by simply loading up a platform and going through each currency pair and figuring out whether or not it fits your trading style. This is the list of all major forex pairs available for trading on the Forex market.

How to start trading?

The GBP/USD is particularly favoured by day traders​, who aim to take advantage of price fluctuations by dipping in and out of the market at a quick and precise pace. For this reason, it is also one of the best forex pairs for swing trading​, another short-term forex strategy. It is recommended that those who trade this volatile currency pair strengthen their knowledge of technical analysis of the market before opening any positions. The majors and the commodity pairs are the most liquid and most widely traded currency pairs in the forex market. These pairs and their combinations (EUR/JPY, GBP/JPY and EUR/GBP) make up the vast majority of all trading on the forex. Due to the fact they attract the largest volume of buyers and sellers, spreads are typically the tightest.

In some cases, forex traders prefer to trade on currency pairs with a lower or tighter spread as it reduces the overall costs involved in the trade. However, some traders prefer to trade on volatile currency pairs with wider spreads and lower liquidity in an attempt to profit from the fluctuating gaps in price. So, the British pound, the Japanese yen, the Swiss franc, the Australian, and the Canadian dollars will make up the most actively traded currency pairs together with the US dollar and the Euro. In the future I believe that currency trading would also gain due importance at par with the equity derivative segment as more and more participants enter this segment and start trading in all the pairs. Also once the demand for fair and transparent services in currency derivative segment would rise and more and more brokers will come in future to offer trading in cross currency pairs as well.

As the value of the CHF strengthens against the USD due to increasing investment, the price of this currency pair starts to drop. Although it is one of the most stable currency pairs to trade and therefore offers many benefits. However, when the markets are in a more stable position, the USD/CHF may be of less interest to traders who opt for other major currency pairs that are featured on this list. While you can trade almost any currency pair in theory, there are certain pairs that are consistently the most traded currency pairs in the forex market. These major pairs make up 80% of the entire trading volume in the Forex market.

It has never been easier to access the global markets from one trading account. The Forex market is a truly global market where economic, political and regulatory trends and policies can affect the currencies movements. Using our trading platform, you can trade all the major currencies across the world.

Trade your strategy

You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. If you want to test your trading strategy with popular Forex pairs, try our free demo account which includes live market quotes and a range of Forex trading indicators. You’ll be able to view in real-time how the currency pairs perform and familiarise yourself with the trading tools and terminology.

The Hong Kong dollar is allowed to fluctuate within a band of HK$7.75 to HK$7.85 to US$1, and traders can take advantage of any price movements within this band. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money. 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.

Minor pairs, also known as cross-currency pairs, don’t contain the US dollar, but still include widely traded currencies like the euro, British pound, and Japanese yen. Minor pairs are generally less popular among traders as they are less liquid and often have higher spreads. The United States dollar is the most commonly traded currency in the world, and therefore most major forex pairs include the USD as the base or quote currency. When combined with other currencies from some of the world’s biggest economies, including China, Japan and the United Kingdom, these are seen as major crosses.

Trades are executed at the rate you see, on easyMarkets platforms ensuring you will never be surprised by a spread change during volatility. Simply answer a few questions about your trading preferences and one of Forest Park FX’s expert brokerage advisers will get in touch to discuss your options. As an example of the American Dollar’s supremacy, a few nations besides the U.S. use the U.S. Dollar as their official currency, such as El Salvador, Panama and Ecuador.

Get full access to all features within our Corporate Solutions. If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. Plus500UK Ltd is authorised and regulated by the Financial Conduct Authority . Please consider the information in light of your objectives, financial situation and needs. So, having explored the 6 Major Forex Currency Pairs, you should now be confident to be able to step into the Forex trading world and place your first Forex trade with Hantec Markets.

Other Crosses

Regarding the FX market, there are four main CEE currencies to be aware of. So when paired with the U.S. dollar, USD/SEK is read “dollar stockie” and USD/NOK is read “dollar nockie”. This meant that these countries now had one currency, with the same monetary value, with the exception CM Trading Analysis that each of these countries minted their own coins. Back in the day, Denmark and Sweden established the Scandinavian Monetary Union to merge their currencies to a gold standard. For those of y’all who are really mesmerized by exotics, here’s a more comprehensive list.

The CAD tends to surge when oil prices are rising, and on the opposite, falling oil prices drive the CAD down. By the way, the Canadian dollar is also called ‘loonie’ because of the appearance of a loon on the back of the Canadian dollar coin. The G10 currencies are ten of the most heavily traded currencies in the world, which are also ten of the world’s most liquid currencies. An exotic currecy is a currency from countries with developing or emerging markets. The more frequently traded something is the higher its liquidity.

The foreign exchange market, commonly referred to as the forex market, is based on the trading of one currency for another. The exact amount of one currency that is exchanged for an amount of a second currency is determined by the value of each. The US Dollar is the primary reserve currency globally and dominates international trade. The supply of US Dollars is controlled by the US central bank, the Federal Reserve. Although the US Dollar has been forecast to eventually surrender its dominant global position to the Euro, the US currency remains a safe haven in times of crisis and the key global reserve currency.

Ready to trade forex?

Create a trading plan to establish clear rules around your forex trading decisions. These sale desks intermediated 77% of all currency trading in April 2016, according to BIS statistics. AUD/USD is strongly affected by the value of commodities upon which the Australian economy largely depends, mainly coal, iron ore and a variety of metals like copper. As the prices of these commodities shift, so will the Aussie dollar relative to that of the US. Please ensure you fully understand the risks involved, seeking independent advice if necessary prior to entering into such transactions.Please click here to view our Risk Disclosure. Keep up to date with our news and analysis section of the website, which can provide insight and predictions into future movements in the forex market.

Fortunately, figuring P&L doesn’t have to be an exhaustive task. All you need is your account currency, pair, trade size and opening/closing prices—the Profit Calculator does the rest. Perhaps the single most beneficial attribute of the forex is flexibility. Unlike in more conventional trading modules such as stocks, forex trading profits are not limited only to buying low and selling high.

Euro Crosses

As we mentioned, there are three categories of currency pairs to trade in the Foreign Exchange market – those are major currency pairs, minor currency pairs, and exotic pairs. The US dollar and Swiss Franc currency pair, also known as trading the “Swissie”, may initially sound a surprise inclusion as Switzerland isn’t a major global economy. However, this currency pair is popular due to the strong reputation Switzerland holds as a safe haven. With a stable financial system and government, traders turn to the franc in times of economic uncertainty. Although it is less liquid than the other major pairs listed, it’s still a popular choice among traders. “The Chunnel” is a combination of the Euro and the British pound sterling, a play on words for the Channel Tunnel that connects both continents.

Trading Strategies

If we expanded into exotic currency pairs, there would be over 100 variations. Trade popular currency pairs and CFDs with Enhanced Execution and no restrictions on stop and limit orders. Australia is one of the most blessed countries in the world in terms of resources. The country has vast deposits of gold, silver, copper, and diamonds.

Once you are done with all the checks, go to the preferred trading platform, and start trading. Go to the Withdrawal page on the website or the Finances section of the FBS Personal Area and access Withdrawal. You can get the earned money via the same payment system that you used for depositing. In case you funded the account via various methods, withdraw your profit via the same methods in the ratio according to the deposited sums.