Content
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.
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:
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.
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.
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
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.
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.
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.
Another frequently traded currency pair, the AUD/USD, tells you that you need to buy an Australian Dollar in US Dollars.
Another great currency pair, the USD/CAD pair, tells you how many Canadian dollars you need to buy one US dollar.
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.
Certain factors determine the prices of major currency pairs. This includes economic data, interest rates and inflation.
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:
A current account deficit means the country is spending more and earning less. This causes depreciation, lowering the rate of the main currency pair.
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.
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 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.
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 |
$ 100.000
Free Demo
Many people consider the AvaTrade the best trading app. AvaTrade is one of the top foreign exchange brokers for several reasons.
The platform offers copy operations, automated platforms and useful trading features. AvaTrade will assist you throughout your trading process, even providing market analysis videos.
AvaTrade also prioritizes security, providing SSL encryption.
$30 Bonus
Free account
XM is a brokerage that stands out for its educational content. Although it struggles to compete with industry leaders, it puts a strong front in this area.
XM has a score of 84/99. O XM Group offers the complete Meta Trader package along with relevant indicators. The platform offers a good market research package and impressive features.
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.
Frequently asked questions about currency pairs
[box_text] Forex XM Broker Loyalty Program - Trade and earn XM points that…
When it comes to the scope of Forex trading, it is very clear that all traders…
[box_text] This lesson is dedicated to explaining how to create a demo account on the Forex broker…
[box_text] Closing a trade at the most favorable price level is just as important as entering…
[box_text] If you have never traded the HK50, you may be missing a great opportunity to capitalize…
[box_text] Investors of all types use hedging as a strategy to protect…