Forex is the world’s largest and most volatile market, where hundreds of currency combinations are traded. When you buy or sell one currency, you automatically engage in a transaction with another. That’s why currencies are always traded in pairs. Each currency pair consists of a base currency and a quote currency. We’ve Covered Most Traded Currencies Pairs and the base currency is listed first, and the quote currency is shown to the right of it. The price of a currency pair tells you how much of the quote currency you need to buy one unit of the base currency.
In the forex market, there are generally three types of currency pairs: majors, commodity currencies, and cross currencies.
EUR/USD : Euro/US Dollar
This one’s super popular ’cause lots of folks trade it. Tight spreads and all that. The exchange rate depends on what the European Central Bank (ECB) and the US Federal Reserve (Fed) do with interest rates.
USD/JPY : US dollar/Japanese Yen
They call it “the gopher.” It’s also popular and stuff. Interest rates set by the Bank of Japan (BoJ) matter for this one.
GBP/USD : British Pound/US Dollar
People call it “cable,” weird, right? It’s all about how the UK and US economies are doing. Bank of England (BoE) and Fed rates play a part.
AUD/USD : Australian Dollar/US Dollar
This one’s tied to Australia’s exports, like metals and coal. Rates from the Reserve Bank of Australia (RBA) and the Fed move it.
| Currency Pair | Description | Influencing Factors |
|---|---|---|
| EUR/USD | Euro/US Dollar | ECB and Fed interest rates |
| USD/JPY | US Dollar/Japanese Yen (“the gopher”) | Bank of Japan (BoJ) interest rates |
| GBP/USD | British Pound/US Dollar (“cable”) | Bank of England (BoE) and Fed rates |
| AUD/USD | Australian Dollar/US Dollar | Reserve Bank of Australia (RBA) and Fed rates |
| USD/CAD | US Dollar/Canadian Dollar (“loonie”) | Oil prices |
| USD/CNY | US Dollar/Chinese Renminbi | US-China trade war |
| USD/CHF | US Dollar/Swiss Franc (“Swissie”) | Market volatility |
| USD/HKD | US Dollar/Hong Kong Dollar | Hong Kong protests, Hong Kong dollar’s value |
| EUR/GBP | Euro/British Pound Sterling | ECB and BoE announcements, trade ties |
| USD/KRW | US Dollar/South Korean Won | South Korea’s economy, market interest |
USD/CAD : US Dollar/Canadian Dollar
“Loonie” they call it, thanks to Canada’s oil. If oil prices go up, the Canadian dollar’s worth more compared to the US one.
USD/CNY : US Dollar/Chinese Renminbi
US dollar and Chinese yuan, you know? The trade war between them affects this one.
USD/CHF : US Dollar/Swiss Franc
Known as the “Swissie,” this pair includes the US dollar and the Swiss franc. The Swiss financial system’s reputation as a safe haven for investors makes USD/CHF a popular choice.
USD/HKD : US Dollar/Hong Kong Dollar
The Hong Kong protests in 2019 boosted the trading volume of this pair. It’s connected to the value of the Hong Kong dollar, which, in turn, is linked to the US dollar.
EUR/GBP : Euro/British Pound Sterling
This one can be challenging to predict due to the strong trade ties between the Eurozone and the UK. Announcements from the ECB and BoE can significantly affect its exchange rate.
USD/KRW : US Dollar/South Korean Won
This pair made its way into the top ten list, comparing the US dollar to the South Korean won. South Korea’s impressive economic growth has contributed to its popularity.
- Also Read : Top 10 U.S Economic Indicators
So, like, even though EUR/USD’s the big shot, there are other pairs to check out. Picking one involves looking at lots of stuff and maybe even making mistakes along the way.
