Raycho Angelov | 14.06.23 | 5 минути за прочитане
In this article, you will learn what currency pairs are and which are the most traded.
Let's get started.
Introduction
Major Forex pairs
Cross currency pairs
Cross pairs with EUR
Cross pairs with GBP
Cross pairs with JPY
Other Cross currency pairs
Exotic currency pairs
Summary
Forex trading involves the concurrent purchase of one currency and the sale of another.
Currencies are traded in pairs through an investment intermediary to access the global financial market.
A currency pair represents the value ratio between two currencies.
The first currency in the pair is the base currency, and the second is the quote currency.
The ratio of the base currency to the quote currency is referred to as the quote.
The quote shows how much of the quote currency is needed to buy the base currency.
For example, in the GBP/USD currency pair, GBP is the base currency and USD is the quote currency.
If the GBP/USD rate is 1.3814, it means that one pound (GBP) is worth 1.3814 US dollars (USD).
If the GBP/USD rate decreases, from 1.3814 to 1.2814 for example, it means that the value of the GBP has decreased relative to the value of the US dollar. At this point, 1 GBP will now be worth 1.2814 USD.
When trading currency pairs, you will always encounter two prices. The price at which you can buy the currency pair is known as the ASK, while the price at which you can sell it is called the BID. The ASK price is always higher than the BID price.
The difference between BID and ASK is called ‘spread’. You will learn more about the spread from the following article:
>> What is ‘spread’ in the financial markets
Currency pairs compare the currencies of two countries or economic zones, as is the case with the Euro (EUR).
Example:
There are several different types of currency pairs:
These currency pairs contain the US Dollar (USD) and are the most frequently traded in the world, usually characterized by higher liquidity and hence lower spreads.
Due to these features, they are a preferred traded instrument, especially by novice traders.
Currency pair | Countries |
---|---|
EUR / USD | Eurozone/USA |
GBP / USD | Great Britain/USA |
USD / JPY | USA/Japan |
USD / CHF | USA/Switzerland |
USD / CAD | USA/Canada |
AUD / USD | Australia/USA |
NZD / USD | New Zealand/USA |
Currency pairs that do not contain the USD are called crosses.
The most traded crosses involve EUR, GBP, and JPY.
Currency pair | Countries |
---|---|
EUR/GBP | Eurozone/Great Britain |
EUR/AUD | Eurozone/Australia |
EUR/NZD | Eurozone/New Zealand |
EUR/CAD | Eurozone/Canada |
EUR/CHF | Eurozone/Switzerland |
Currency pair | Countries |
---|---|
GBP/AUD | Great Britain/Australia |
GBP/CAD | Great Britain/Canada |
GBP/NZD | Great Britain/New Zealand |
GBP/CHF | Great Britain/Switzerland |
Currency pair | Countries |
---|---|
GBP/JPY | Great Britain/Japan |
EUR/JPY | Eurozone/Japan |
AUD/JPY | Australia/Japan |
NZD/JPY | New Zealand/Japan |
CHF/JPY | Switzerland/Japan |
CAD/JPY | Canada/Japan |
Currency pair | Countries |
---|---|
NZD/CAD | New Zealand/Canada |
AUD/NZD | Australia/New Zealand |
CAD/CHF | Canada/Switzerland |
AUD/CAD | Australia/Canada |
NZD/CHF | New Zealand/Switzerland |
AUD/CHF | Australia/Switzerland |
Exotic currency pairs contain one major currency and one currency of so-called emerging economies.
The table below describes some of the most popular and traded exotic currency pairs.
Keep in mind that these currency pairs are traded less frequently than the cross pairs and major currency pairs.
As a result, the trading costs, including spread, swap, and commission, are significantly higher.
Open an account and trade with some of the lowest spreads on the market:
Trade with a secure broker
Founded in 2010, ThinkMarkets is a multi-regulated broker with offices across the globe including Australia, Asia, Japan, Europe, the UK, UAE, South Africa, and clients in more than 165 countries.
Currency pair | Countries |
---|---|
USD/SAR | USA/Saudi Arabia |
USD/BRL | USA/Brasil |
USD/ZAR | USA/South Africa |
USD/MXN | USA/Mexico |
USD/RUB | USA/Russia |
USD/SEK | USA/Sweden |
USD/NOK | USA/Norway |
USD/PLN | USA/Poland |
USD/DKK | USA/Denmark |
All currency pair trades involve the simultaneous buying of one currency and selling of another.
A currency pair functions as a tradable instrument, which can be bought and sold.
To learn how to start Forex trading, read this article:
>> Forex Trading: A Complete Beginner's Guide
When you buy a currency pair, you are purchasing the base currency while simultaneously selling the quote currency.
Conversely, when you sell a currency pair, you are selling the base currency and simultaneously buying the quote currency.
The most traded currency pair is the euro against the US dollar (EUR/USD).
For this reason, it is the most liquid currency pair in the world.
In addition, it is also the most suitable for beginner traders, precisely because of the high liquidity and low costs of the positions.