Forex pairs: What Are the Most Commonly Traded Currency Pairs?

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cross currency pairs

In turn, this would cause the price of AUD/USD to fall – as fewer US dollars are needed to buy an Aussie dollar. That’s why the yen is commonly said to be under a ‘dirty float’ regime – as it is a floating currency, but not in the truest sense of the word. So, trading USD/JPY is a means of capitalising on these more regular fluctuations – if you’re able to buy and sell at the right time.

For example, if you buy pound versus US dollar (GBP/USD), you are anticipating a rise in the pound at the expense of the US dollar. Profit and loss is normally expressed in the amount of the secondary currency in forex trading. Commodity currencies are individual currencies or forex pairs in which the price is determined largely by the value of a certain commodity on which that currency’s economy is heavily dependent. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument.

For four years after 2011, the value of the franc was pegged to the euro by the Swiss National Bank. Contemporarily, the franc operates under a floating exchange rate – but this has not affected its reputation as one of the most stable currencies on the market. It holds the euro as the base currency and the US dollar as the quote currency, so the price represents how many dollars you would need to spend in order to buy one euro.

Live forex currency rates in pairs

The risks of loss from investing in CFDs can be substantial and the value of your investments may fluctuate. 75% of retail client accounts lose money when trading CFDs, with this investment provider. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how this product works, and whether you can afford to take the high risk of losing your money. 72% of retail investor accounts lose money when trading CFDs with this provider.

The G10 currencies are ten of the most heavily traded currencies in the world, which are also ten of the world’s most liquid currencies. Exchange rates fluctuate based on which currency is stronger at the moment. Imagine each currency pair constantly in a “tug of war” with each currency on its own side of the rope. Find the approximate amount of currency units to buy or sell so you can control your maximum risk per position. The US dollar and the Canadian dollar have a strong correlation, due to being fiscal neighbours and important trading partners.

This will impact your decision on what to trade, as it can increase risk. Commodity currencies are those from countries that have large quantities of commodities or other natural resources. The exchange rate of the currencies of these countries are tied to their respective export activities.

On the world market would likely cause a reciprocal slump in the value of the Australian dollar. In the case of the AUD/USD currency pair, this means the US dollar would become stronger, so it would cost fewer US dollars to buy one Australian dollar. A dual currency service allows investors to speculate on exchange rate movement between two currencies. A currency pair is a pairing of currencies where the value of one is relative to the other. For example, GBP/USD is the value of the British pound relative to the U.S. dollar. For example, a political scandal or unexpected election results can cause an exotic pair’s exchange rate to swing violently.

Forex currency pairs

The USD/CHF currency pair is made up of the US dollar and the Swiss franc and is commonly known as the ‘Swissie’. USD/CHF is a popular currency pair because the Swiss financial system has historically been a safe haven for investors and their capital. Currencies are always traded in pairs because when you buy or sell one currency, you automatically sell or buy another.

But – similar to the yen – the Swiss franc owes much of its popularity status to a relatively stable currency. This has made the franc a popular currency in times of economic uncertainty or market turmoil, as traders seek markets that are perceived as less volatile – similar to the USD/JPY pair. As such, traders should keep an eye on the price of both Brent crude and US crude when trading USD/CAD, as any fluctuations in the oil market will likely reverberate in the exchange rate of this forex pair.

In every currency pair, there is a base currency and a quote currency – the base currency appears first, and the quote currency is to the right of it. The total amount of currency trading involving these 18 pairs represents the majority of the trading volume in the FX market. This manageable number of choices makes trading a lot less complicated compared to dealing with equities, which has thousands of possible choices to choose from. While not as frequently traded as the majors, the crosses are still pretty liquid and still provide plenty of trading opportunities. StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider.

price movements

This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is financial, investment, legal, tax or other advice and no reliance should be placed on it. USD/SGD is the exchange rate between the US dollar and the Singaporean dollar, also called the ‘Sing’.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. But the value of the Canadian dollar is also heavily correlated with commodity prices, especially the price of oil, as Canada’s economy relies heavily on exporting crude. So, this makes it important to monitor the price of oil to determine the ideal time to buy if you want to exchange USD for CAD.

Trading USD/CAD

EUR/USD – or the ‘fibre’ – is widely considered the most popular forex pair as it typically comes with the highest volume and among the lowest spreads. Unsurprisingly, its popularity also stems from the fact it’s the best way to take a position on two of the largest economies in the world – the United States and the Eurozone. The base currency is the one that a trader thinks will go up or down against the second currency in the pair.

Buying And Selling Currency Pairs

Stay on top of upcoming market-moving events with our customisable economic calendar. Discover why so many clients choose us, and what makes us a world-leading provider of CFDs. Economic growth in South Korea has been so impressive – especially since the end of the Korean war in 1953 – that people often refer to it as the Miracle on the Han River. USD is the currency abbreviation for the United States dollar, the official currency of the United States of America. Anderson is CPA, doctor of accounting, and an accounting and finance professor who has been working in the accounting and finance industries for more than 20 years. Her expertise covers a wide range of accounting, corporate finance, taxes, lending, and personal finance areas.

Cross pairs can provide trading opportunities when the majors are presenting less favourable conditions. Currency pairs are the national currencies from two countries coupled for trading on the foreign exchange marketplace. Both currencies will have exchange rates on which the trade will have its position basis. All trading within the forex market, whether selling, buying, or trading, will take place through currency pairs. Currency pairs are the national currencies from two countries coupled for trading on theforeign exchange marketplace.

Cross currencies

Much in the same way as the Fed and ECB, the Bank of Japan sets the interest rates for the Japanese economy which, in turn, affects the value of the yen relative to the US dollar. The price displayed for a currency pair represents the amount of the quote currency you will need to spend in order to purchase one unit of the base currency. It’s important to monitor the ongoing political and economic ties between the UK and EU to trade EUR/GBP, as well as the interest rates set by the Bank of England and the European Central Bank. As Singapore is one of the largest financial hubs in Asia, trading the USD/SGD pair is seen as a great way to get exposure to the country’s strong economy and the entire continent. More recently, the leading factor to monitor when trading the USD/CNY pair is US-China tensions, which have flared up for a number of reasons over the years. For example, in August 2022, US House Speaker Nancy Pelosi visited Taiwan, which caused Beijing to suspend US-China climate talks and cut off high-level military communication channels.

Essentially, an investor will receive a higher return for their initial capital in an environment with higher interest rates. As with other commodity currencies, the value of the US dollar greatly affects the pricing of the AUD/USD pair. This is because a stronger US dollar often means that Australian exports will be cheaper, which can reduce the value of the Australian dollar. The South Korean economy has grown during the turn of this century to become the fourth largest in Asia and the eleventh in the world as of November 2019. This could be a reason for the increased activity that USD/KRW has experienced, as traders and speculators seek exposure to another key Asian market, besides those of Japan, China and Hong Kong. To keep up to date with any Brexit news that may have affected the price of the EUR/GBP currency pair, visit IG’s Brexit events page.

The EUR/USD pair is primarily influenced by political movements that affect the dollar, the euro and their relationship to one another. For example, if the Federal Reserve intervenes in market activities to strengthen the dollar currency, you can expect it to rise against the euro and for the EUR/USD pair to decline in value. The forex market is known for its high liquidity, which means that transactions can be executed quickly and efficiently.

GBP/EUR is a key currency pair that explores the relationship between the British pound and the euro. GBP/EUR experienced significant volatility and has been especially volatile ever since the UK voted to leave the European Union on 23 June 2016. The pair also displayed notable movements during 2020, when the Covid-19 pandemic all but shut down national economies across the UK and Europe. The final commodity currency which appears on most major currency lists is the NZD/USD pair. This is the New Zealand dollar against the US dollar – otherwise known as the ‘kiwi’. Agriculture – as well as international trade and tourism – is key to the New Zealand economy, so the price movements of soft commodities will often play out on NZD/USD.

The value of the HK dollar is actually pegged to the US dollar in what’s known as a ‘linked exchange rate’. This means the HKD is only allowed to fluctuate against USD within a set band of between 7.75 and 7.85. USD/CHF is the currency pair made up of the US dollar against the Swiss franc the official currency of Switzerland. That’s because Australia remains one of the most dominant exporters of coal and iron ore in the world. A slump in commodity prices would impact the economy and decrease the value of the Australian dollar.

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