What are the most traded currency pairs on the forex market?
There are seven major currency pairs in the Forex market. Other brackets include cross currency pairs and exotic pairs, which are less commonly traded and all are relatively illiquid (i.e. not easily exchangeable for cash).
- Major currency pairs
The major currency pairs are the most traded, and they account for approximately 80% of the trading volume in the forex market.
These currency pairs can usually have low volatility and high liquidity.
Four major currency pairs are the EUR/USD, USD/JPY, GBP/USD, and USD/CHF.
They are associated with stable and well-managed economies, which are less prone to manipulation and have lower spreads than other pairs.
Cross currency pairs – crosses – are pairs that do not include the US dollar.
Historically, cross currencies were converted first into the US dollar and then into the desired currency, but are now offered for direct exchange.
Most popular in trading is a derivative of minor currency pairs (eg EUR / GBP, EUR / JPY, GBP / JPY); They are usually less liquid and more volatile than the major currency pairs.
- Exotic currency pairs
Exotic coins are currencies from emerging or smaller economies, paired with a major symbol.
Compared to the major currencies and major crises, exotic currencies are more risky to trade because they are less liquid, more volatile, and more prone to manipulation.
It also contains broader margins and is more sensitive to sudden shifts in political and financial developments.
The table below shows several different currency pairs from each chip, as well as some nicknames coined by the traders themselves.