Types of Currency Pairs

Types of Currency Pairs

In our previous articles, we introduced you to the currency trading. This article will explain the basic currency pairs and how they are called in the trading lingo.

Majors, Minors & Exotics

Currency market is huge and there are more than 180 currencies in the world. However, most volume is generated by a dozen of currency pairs. 

In fact, about 66% of currency trading involves pairs that are called Majors. All majors include USD and another major currency. EURUSD is the undisputed king with 1/3 volume of all trades.

SymbolNamesNickname
EUR/USDEuro and US dollarFiber
USD/JPYUS dollar and Japanese yenGopher
GBP/USDBritish pound and US dollarCable
USD/CHFUS dollar and Swiss francSwissie
AUD/USDAustralian dollar and US dollarAussie
USD/CADUS dollar and Canadian dollarLoonie
NZD/USDUS dollar and Canadian dollarKiwi

Minors are popular currency pairs that don’t include USD. Also known as cross-currency pairs, this list is dominated by British Pound (GBP), Euro (EUR) and Japanese Yen (JPY).

EUR/GBPBritish pound and euro
EUR/CHFEuro and Swiss franc
EUR/JPYEuro and Japanese yen
GBP/JPYPound and Yen
GBP/CADPound and Canadian Dollar
CHF/JPYSwiss franc and Japanese Yen
EUR/AUDEuro and Australian Dollar

Besides majors and crosses, some traders prefer pairs including a major currency and a developing economy’s currency. These are called Exotic pairs. Here are the most popular exotic pairs:

EUR/TRYEuro and Turkish Lira
USD/HKDUS Dollar and Hong Kong Dollar
JPY/NOKJapanese Yen and Norwegian Krone
NZD/SGDNew Zealand Dollar and Singapore Dollar
GBP/ZARPound and South African Rand
AUD/MXNAustralian Dollar and Mexican Peso

Which currency pair should you trade?

There is no single correct answer. For beginners, it is often recommended to start trading currency market with EURUSD pair. Because EURUSD is the most traded and the most analyzed currency pair in the world. New traders can easily find technical and fundamental analysis about EURUSD. Also, EURUSD’s gigantic trading volume makes it too easy to find liquidity in the market. That is why the spreads will be as tight as possible for all brokers. 

However, if you are more familiar with a specific country’s economy and politics, you might have better insight into its currency’s movements. So, don’t be shy about experimenting with different currency pairs on your demo account. Remember: as a trader, knowledge is the most powerful leverage you will ever use.

Continue your trading education journey with the next article.

This post is also available in: Español

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