Top Forex Currency Pairs and Why You Should Trade Them

Major Forex Currency Pairs

If you are a Forex trader or want to trade one currency for another, you must know the main Forex currency pairs. Major currency pairs represent a large percentage of forex transactions worldwide. The main currency pairs Forex , in addition to contributing so much to transactions, are also important in speculation.

Knowing the rates of major currency pairs allows you to see when a certain currency goes up compared to another.

The importance they have in trading allows for some smart investment decisions and some useful knowledge. Here, we will talk about the main Forex currency pairs, what they are and their main specifications.

What are the main Forex currency pairs?

What are the main Forex currency pairs

Major currency pairs are the four most traded pairs. Forex traders buy and sell these currency pairs in large volumes. Major currency pairs are part of the Group of Ten currency group and are popular with speculators and traders.

Some people think that these currency pairs determine the direction of the forex market. The four major currency pairs are:

  • EUR / USD
  • USD / JPY
  • GBP / USD
  • USD / CHF

The main currency pairs are those pairs that include the US dollar, as it is considered to be the largest economy in the world. As a result, major currency pairs have tight spreads and attract more traders, which leads to higher volume.

Top 7 Forex currency pairs

While most people see the four pairs listed above as the major currencies, some people think that other pairs such as AUD/USD, CAD/USD and NZD/USD also count as major currencies. We will look at 7 major currency pairs.

1. EUR/USD

The EUR/USD currency pair tells you how many US Dollars you need to buy one Euro. EUR/USD consists of two of the biggest economies in the world, so the currency is quite popular among traders. It leads the main Forex pairs and is the most traded currency in the world. EUR/USD also trades large volumes.

Biggest currency pairs by volume

Biggest currency pairs by volume

2. USD/JPY

The USD/JPY currency pair tells you how many Japanese Yen you need to buy one US Dollar. USD/PY is another frequently traded currency pair, coming in second to EUR/USD. The USD/JPY rate is a benchmark for the performance of the Asian economy.

3. GBP / USD

The GBP/USD rate shows how many US dollars it takes to buy a pound sterling. An old currency pair, the GBP/USD, is widely used and frequently traded across the world.

4. USD/CHF

Known as the “Swissie”, the USD/CHF rate tells you how many Swiss francs you need to buy one US dollar. Switzerland is a popular place to store money due to the prioritization of privacy when conducting banking transactions.

5. AUD/USD

Another frequently traded currency pair, the AUD/USD, tells you that you need to buy an Australian Dollar in US Dollars.

6. USD/CAD

Another great currency pair, the USD/CAD pair, tells you how many Canadian dollars you need to buy one US dollar.

7.NZD/USD

NZD/USD is a popular pair as USD is the most important currency in the world and NZD is in the top ten. It tells you how many US Dollars you need to buy one NZ Dollar.

 

What determines the price of major Forex currency pairs?

Certain factors determine the prices of major currency pairs. This includes economic data, interest rates and inflation.

If you are a Forex trader or want to trade one currency for another, you must know the main Forex currency pairs. Major currency pairs represent a large percentage of forex transactions worldwide. Major Forex currency pairs, in addition to contributing so much to transactions, are also important in speculation.

Interest rate

Interest rates are the central determinant of currency pair prices. When central banks raise interest rates, demand for the currency increases as traders feel they can earn higher yields.

When the demand for the currency increases, the price of the currency also increases. Consequently, interest rate fluctuations often determine the exchange rate of major currencies.

If you are a Forex trader or want to trade one currency for another, you must know the main Forex currency pairs. Major currency pairs represent a large percentage of forex transactions worldwide. Major Forex currency pairs, in addition to contributing so much to transactions, are also important in speculation.

Inflation

Inflation also determines the exchange rate of a currency pair. This happens when the general price level of one country goes up or down compared to another.

Depending on the direction, the exchange rate will increase or decrease. In the case of major currency pairs, inflation in an economy that is part of a pair can affect the price of the major currency pair.

If you are a Forex trader or want to trade one currency for another, you must know the main Forex currency pairs. Major currency pairs represent a large percentage of forex transactions worldwide. Major Forex currency pairs, in addition to contributing so much to transactions, are also important in speculation.

Political stability

Forex traders and investors know that political instability creates uncertainty and fluctuations in exchange rates. Therefore, when a country has a large number of political scandals, investors will demand less of the currency, depressing the exchange rate.

When this happens in an economy like the United States, the prices of major currency pairs fall.

If you are a Forex trader or want to trade one currency for another, you must know the main Forex currency pairs. Major currency pairs represent a large percentage of forex transactions worldwide. Major Forex currency pairs, in addition to contributing so much to transactions, are also important in speculation.

Economy

Economic data and the performance of the economy can also affect the price of the major currency pair. For example, a country with a decent GDP and a good trade policy is attractive to investors. If that country is part of a currency pair, the price of the pair will increase.

If you are a Forex trader or want to trade one currency for another, you must know the main Forex currency pairs. Major currency pairs represent a large percentage of forex transactions worldwide. Major Forex currency pairs, in addition to contributing so much to transactions, are also important in speculation.

Speculation

When people buy and sell coins, the value of the coin changes. Speculators often demand more high-value coins to make a profit. When speculators buy more than one currency, its value increases. This is what happens with major currency pairs.

If you are a Forex trader or want to trade one currency for another, you must know the main Forex currency pairs. Major currency pairs represent a large percentage of forex transactions worldwide. Major Forex currency pairs, in addition to contributing so much to transactions, are also important in speculation.

Macroeconomic Data

Inflation and interest rates are just two of the macroeconomic factors that impact the price of major currency pairs. Other variables can also change the price. These include:

If you are a Forex trader or want to trade one currency for another, you must know the main Forex currency pairs. Major currency pairs represent a large percentage of forex transactions worldwide. Major Forex currency pairs, in addition to contributing so much to transactions, are also important in speculation.

Conta current

A current account deficit means the country is spending more and earning less. This causes depreciation, lowering the rate of the main currency pair.

If you are a Forex trader or want to trade one currency for another, you must know the main Forex currency pairs. Major currency pairs represent a large percentage of forex transactions worldwide. Major Forex currency pairs, in addition to contributing so much to transactions, are also important in speculation.

Purchase price parity

If the price of a good in one country is not the same as in another, the law of purchasing power parity is violated. This will change interest rates and relative prices, which can have an impact on the exchange rate.

If you are a Forex trader or want to trade one currency for another, you must know the main Forex currency pairs. Major currency pairs represent a large percentage of forex transactions worldwide. Major Forex currency pairs, in addition to contributing so much to transactions, are also important in speculation.

terms of exchange

The ratio of exports to imports determines an economy's income. Higher revenue means higher demand for a country's currency. This leads to a higher exchange rate.

If you are a Forex trader or want to trade one currency for another, you must know the main Forex currency pairs. Major currency pairs represent a large percentage of forex transactions worldwide. Major Forex currency pairs, in addition to contributing so much to transactions, are also important in speculation.

Debt

The amount of public debt can also influence the rate of major currencies. If word of government debt spreads, foreign investors will sell their bonds, depressing the exchange rate.

If you are a Forex trader or want to trade one currency for another, you must know the main Forex currency pairs. Major currency pairs represent a large percentage of forex transactions worldwide. Major Forex currency pairs, in addition to contributing so much to transactions, are also important in speculation.

Forex Data Calendar

Forex Data Calendar

Economic Calendar

As mentioned, certain factors can lead to changes in the rates of major currency pairs. With o economic calendar, you can track financial details and events around the world. This information will help you make business decisions.

 

Why Traders Choose Forex Majors

Most forex traders use a major currency pair, which is shown in the currency's trading volumes. The reasons they choose major currency pairs include volatility, size and slippage.

Volatility: High trading volume leads to low volatility. Therefore, major currency pairs have low volatility. Most traders want low volatility because there is less risk, which makes it perfect for beginners.

Average daily volatility of the main

Average daily volatility of the main pairs

Volume: the greater the volume of a currency pair, the narrower the spreads tend to be. This attracts a lot of traders, which in turn keeps the volume high.

Size: the Major currency pairs have large volumes, which makes it easy for Forex traders to get in and out. Traders can often have larger position sizes because of this.

Slippage: another advantage that high volume brings is that it lessens the chance of slippage or reduces the amount of slippage.

Major Pairs Trading vs. exotic

Exotic pairs consist of a major currency and a currency of a developing country. Examples of exotic pairings include:

— EUR/TRY

— USD/HKD

— NZD/SGD

— AUD/MXN

 

Liquidity spreads Volume Risco Leverage
Major Pairs Alto Low 6.37%-27.95% Alto Alto
table division Low Alto Médio Low Low

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Summarizing the major currency pairs

Major currency pairs are widely used currencies with high volumes, low spreads and low volatility. They cover most economic transactions and speculations.

These currency pairs determine the direction of the forex market and attract traders, keeping their volume high. Major Forex pairs include the US Dollar.

In addition to major currency pairs, you can opt for exotic pairs, but they have low liquidity, high spreads, and high volatility.

You can track important economic events or financial information through a Forex broker's economic calendar.

If you are a Forex trader or want to trade one currency for another, you must know the main Forex currency pairs. Major currency pairs represent a large percentage of forex transactions worldwide. Major Forex currency pairs, in addition to contributing so much to transactions, are also important in speculation.Frequently asked questions about currency pairs

What is the most traded currency pair?
The EUR/USD is the most traded currency pair as it includes two of the biggest economies in the world. This currency pair has the highest volume and attracts many traders.
What is the weakest currency in the world?
The Iranian Rial is the weakest currency in the world. This is mainly because Iran is sanctioned by the US for exporting oil.
What is the safest currency to own?
The Norwegian krone and the Singapore dollar are the two safest currencies. This is because Norway has no debt, so the currency is safe.
What are the top 5 currencies?
The top five currencies are the US dollar, the pound sterling, the Japanese yen, the pound sterling and the Swiss franc. These are the most traded currencies.

 

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