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.
| Symbol | Names | Nickname |
| EUR/USD | Euro and US dollar | Fiber |
| USD/JPY | US dollar and Japanese yen | Gopher |
| GBP/USD | British pound and US dollar | Cable |
| USD/CHF | US dollar and Swiss franc | Swissie |
| AUD/USD | Australian dollar and US dollar | Aussie |
| USD/CAD | US dollar and Canadian dollar | Loonie |
| NZD/USD | US dollar and Canadian dollar | Kiwi |
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/GBP | British pound and euro |
| EUR/CHF | Euro and Swiss franc |
| EUR/JPY | Euro and Japanese yen |
| GBP/JPY | Pound and Yen |
| GBP/CAD | Pound and Canadian Dollar |
| CHF/JPY | Swiss franc and Japanese Yen |
| EUR/AUD | Euro 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/TRY | Euro and Turkish Lira |
| USD/HKD | US Dollar and Hong Kong Dollar |
| JPY/NOK | Japanese Yen and Norwegian Krone |
| NZD/SGD | New Zealand Dollar and Singapore Dollar |
| GBP/ZAR | Pound and South African Rand |
| AUD/MXN | Australian 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.
