Major pairs in Forex are the most traded currency pairs in the world, and it is estimated that trading on those currencies represents over 80% of the whole foreign exchange market. In this article, you will find out which currency pairs those are, how the forex market works, and how you can use your newly gained knowledge to enter the markets more confidently.
What Is a Currency Pair?
A currency pair is made of two currencies traded in the forex market. Here’s what you need to know to understand how trading currencies works:
- All currency pairs are quoted in terms of one currency versus another.
- Each currency pair has a ‘base’ which is the first denoted currency, and a ‘counter’ which is the second denoted currency.
- Each currency could strengthen (appreciate) or weaken (depreciate). As there are two currencies in each pair, there are essentially four variables you are speculating on when it comes to currency pairs.
- There are major currency pairs, minor and exotic currency pairs.
Placing a Trade on a Currency Pair
When you place a trade on a currency pair, you’re essentially buying one currency and selling another - but in a single transaction. So for example, going long or ‘buying’ EUR/USD means you’re buying the euro and selling the US dollar. Going short means that you’re ‘selling’ the euro and buying the US dollar.
Currency values rise (appreciate) and fall (depreciate) against each other due to a number of economic, geopolitical and technical factors. The forex market is the most traded market in the world, with an average turnover in excess of $5 trillion a day. This makes it a highly volatile market and it’s available to trade 24 hours a day, five days a week (Monday to Friday).
Which Are the Major Pairs in Forex?
Currently, the most traded currency pairs in the world are EURUSD, GBPUSD, USDCHF, USDJPY, AUDUSD, and USDCAD. It is estimated that trading on those currencies represents over 80% of the whole foreign exchange market.
Check our Instrument Specification to see which currency pairs you can trade on with XTB.
FAQ
- EUR/USD (euro/US dollar)
- GBP/USD (British pound/US dollar)
- USD/CHF (US dollar/Swiss franc)
- USD/JPY (US dollar/Japanese yen)
- AUD/USD (Australian dollar/US dollar)
- USD/CAD (US dollar/Canadian dollar)
- USD/CNY (US dollar/Chinese renminbi)
- USD/HKD (US dollar/Hong Kong dollar)
- EUR/GBP (euro/British pound sterling)
- USD/KRW (US dollar/South Korean won)
Majors are the most commonly traded currency pairs globally. They involve the currencies euro, US dollar, Japanese yen, pound sterling, Australian dollar, Canadian dollar, and the Swiss franc. The major currencies are those in which most of the world’s foreign transactions are denominated, which means they are the most liquid. They are also the currencies that countries most commonly value their own currency against.
Minors, also known as cross currency pairs, are pairs that do not include the US dollar, but do include at least one of the world's other three major currencies.
Exotic pairs are usually made up of a major currency alongside a thinly traded currency or an emerging-market economy currency. Examples include USD/TRY, USD/MXN/ EURPLN or EUR/HUF.
You can learn more about Forex terminology in this article.
The EUR/USD pair is regarded as the most profitable currency pair in forex due to high liquidity, as the European economy is the second-largest globally, while the US economy is the largest.
There is no safe currency pair to trade, as all trading activities come with the potential to lose your money. However, EUR/USD is often considered the most stable pair, as it doesn't tend to spike too much, often making it more suitable for risk-averse traders.
The EUR/USD is one of the most traded pairs in the forex market that also comes with a very low spread. This means that traders can start with a small capital.
Traders interested in scalping often opt for major currency pairs, such as the EUR/USD, GBP/USD and AUD/USD, as well as certain minor currency pairs, such as the AUD/GBP.
The most volatile currency pairs tend to be:
- AUD/GBP (Australian Dollar/Pound Sterling)
- AUD/JPY (Australian Dollar/Japanese Yen)
- AUD/USD (Australian Dollar/US Dollar)
- CAD/JPY (Canadian Dollar/Japanese Yen)
- NZD/JPY (New Zealand Dollar/Japanese Yen)
The least volatile currency pairs are generally the majors. They are the currency pairs which have historically been the most popular among traders. These usually include EUR/USD, USD/JPY, GBP/USD and USD/CHF.
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
