A forex currency pair refers to the pairing of two currencies in a forex market whose value is relative to each other is called currency pair in the forex
There are 28 currency pairs in forex including major and minor forex currency pairs.
In the forex market, forex currency pairs are divided into three main types based on trading activity, liquidity, and volume worldwide. The value of each currency is relative to other currency in a currency pair. In the forex market, we are buying one currency and selling other currency simultaneously during a forex trade.
Three types of currency pairs are following
- Major currency pairs
- Minor currency pairs
- Exotic currency pairs
Forex major currency pairs
The currency pair which includes the US dollar as a base or quote currency is called the forex major currency pair. Major currency pairs are the most widely traded currency pairs and are highly liquid.
There are many benefits of major currency pairs.
- Highly liquid
- High volume
- Low spread
- Low broker commission
7 major forex currency pairs are following:
| Currency Pair | Currency Name |
|---|---|
| EURUSD | Euro / US Dollar |
| USDCHF | US Dollar / Swiss France |
| AUDUSD | Australian Dollar / US Dollar |
| GBPUSD | British Pound / US Dollar |
| NZDUSD | New Zealand Dollar / US Dollar |
| USDJPY | US Dollar / Japanese Yen |
| USDCAD | US Dollar / Canadian Dollar |
Forex minor currency Pairs
The currency pair which does not include US dollar currency is called forex minor currency pair.
Minor currency pairs do not provide all the benefits like major currency pairs do but they are still good to trade in forex. There are 21 minor currency pairs in forex. GBP, JPY, and EUR are the most widely traded minor currencies.
| Currency Pair | Currency name |
|---|---|
| EURGBP | Euro / British Pound |
| EURCAD | Euro / Canadian Dollar |
| EURAUD | Euro / Australian Dollar |
| EURNZD | Euro / New Zealand Dollar |
| EURCHF | Euro / Swiss France |
| EURJPY | Euro / Japanese Yen |
| GBPJPY | British Pound / Japanese Yen |
| AUDJPY | Australian Dollar / Japanese Yen |
| NZDJPY | New Zealand Dollar / Japanese Yen |
| CADJPY | Canadian Dollar / Japanese Yen |
| CHFJPY | Swiss France / Japanese Yen |
| GBPCAD | British Pound / Canadian Dollar |
| GBPAUD | British Pound / Australian Dollar |
| GBPNZD | British Pound / New Zealand Dollar |
| GBPCHF | British Pound / Swiss France |
| AUDNZD | Australian Dollar / New Zealand Dollar |
| AUDCAD | Australian Dollar / Canadian Dollar |
| AUDCHF | Australian Dollar / Swiss France |
| NZDCHF | New Zealand Dollar / Swiss France |
| CADCHF | Canadian Dollar / Swiss France |
| NZDCAD | New Zealand Dollar / Canadian Dollar |
forex exotic currency pairs
The pair of a major currency and currency of a developing country (Turkey, Singapore, Mexico, etc.) is called exotic currency pair.
There are many cons of trading exotic currency pairs due to large spread, high commission rates, and low liquidity.
If you are intraday trader then you should focus only on minor and major currency pairs.
| Currency Pair | Currency Name |
|---|---|
| USDHKD | US Dollar / Hong Kong Dollar |
| USDSGD | US Dollar / Singapore Dollar |
| USDMXN | US Dollar / Mexican Peso |
| USDTRY | US Dollar / Turkish Lira |
| USDNOK | US Dollar / Norwegian Krone |
| USDZAR | US Dollar / South African Rand |
Best Currency pairs to trade
To choose a currency pair, three parameters should be considered.
- Liquidity
- Volume
- Broker spread/commission
EURUSD is the best currency pair to trade. It is the most widely traded currency pair in the world.
Overall, there are three best currency pairs to trade (for beginners too)
- EURUSD
- GBPUSD
- USDJPY
Freedom from blind reactivity begins with self-awareness
Yvan Byeajee
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