The most traded currency pairs

The total trading volume in the Forex Brokers Canada in 2016 was $ 5.088 billion – per day. That is an unimaginable order of magnitude and shows the importance of trading forex. You can take advantage of liquidity when trading if you trade the currency pairs that are responsible for the most sales – even if of course a good strategy is always required. The currency pairs can be divided into three groups according to their trading frequency:

  • Majors : Currency pairs that are most traded
  • Minors : Currency pairs that have a lower trading volume; usually excluding US dollars
  • Exotics : rarely traded currency pairs; often consisting of a major currency and a currency from an emerging country or an emerging developing country

Major currencies

The currencies of strong economic nations and countries with important Forex nz are the “major currencies”. These currencies include the euro, the US dollar, the British pound and the Japanese yen. The Swiss franc is also often counted among the main currencies due to its specific importance for the financial market. The most important minor currencies include foreign exchange from resource-rich countries such as Canada and Australia.

In forex trading , the most common currency pairs look like this:

  • EUR / USD : Euros and US dollars
  • USD / JPY : US dollars and Japanese yen
  • GPD / USD : British pounds and US dollars
  • USD / CHF : US dollars and Swiss francs
  • USD / AUD : US dollars and Australian dollars
  • USD / CAD : US dollars and Canadian dollars

The most important currency pair remains EUR / USD. Even if shares have shifted, buying and selling this pair comes first at 23% of trading volume. The USD / JPY pair is just behind at 17.7%. Another 9.2% are accounted for by GPD / USD and at 3.5%, trading in USD / CHF is already a bit behind. This currency pair has even been overtaken by Forex trading with the minor currencies in recent years (see table). In the following we explain the most important currency pairs in more detail.

The world currency US dollars

The US dollar has a special role in the global financial world. It is considered the world currency because most international transactions are carried out using the US dollar, and it is also the main reserve currency. The gold price is set in US dollars and the OPEC countries’ trade in oil is also carried out in the US currency. These factors make the US dollar the most important currency in the world, which is why the US dollar is also involved in much of foreign exchange trading.

EUR USD

The fact that the Forex Canada pair consisting of the euro and the US dollar is the most traded pair is also due to the strength of the economies that represent the two currencies. While the member states of the EU are responsible for 16.7% (2016) of the global gross domestic product, the USA accounts for 15.5%. China achieved a higher value of 17.8%, since the Chinese yuan, also known as the renminbi, is pegged to the US dollar and not completely freely tradable, and plays only a subordinate role in the forex market.

USD / JPY

The Japanese yen is considered to be the most important Asian currency. Due to the economic strength of Japan – fourth among the countries with the largest share of global GDP, ahead of Germany – and the strong trade relations with the USA and Europe, but also with other Asian countries, many companies have to exchange their local Forex trading UK for yen and vice versa. Because of this, the USD / JPY pair is one of the most widely traded currency pairs in the forex market.

GPD / USD

The British pound plays an important role in global financial markets. When Great Britain was still the world’s leading economic power, the British pound was used as a reserve currency. But even today Great Britain is one of the economically strongest countries in the world and the currency also continues to have a high priority. The share of the financial sector in the UK’s GDP is over 10%, so financial markets play a big role in the UK economy. This is another reason why the GPD / USD currency pair is actively trading.

USD / AUD

The most important secondary currencies are the so-called “commodity currencies”. This includes Australia due to its rich natural resources of gold, coal, aluminum and iron. In addition, there is a large agricultural and service sector. Due to its isolated geographic location and small population, Australia is dependent on importing numerous goods. Global trading results in high trading volume of the USD / AUD pair in the foreign exchange market as well.

USD / CAD

Canada can also come up with abundant raw material deposits (natural gas, oil, wood), which is why the Canadian dollar is also one of the online trading. Due to its geographical location, the Canadians’ most important trading partner is of course the USA. With most of Canada’s exports going to its immediate neighbor, economic changes in the US are also having a major impact on Canada. Low economic growth in the US, for example, can negatively affect Canada’s export figures.