All currencies are valued, bought and sold in pairs. All these trading pairs are classed into 3 types the ‘major’, ‘minor’, or ‘exotic’ class. For instance, the popular EUR/USD combo indicates how many US dollars a single Euro is worth. In any pair, the base currency and the counter currency are separated with a slash sign.
What Are the Major Currency Pairs?
There is no consensus as to which pairs fit into the “FX Majors” class. Most commonly, the term comprises seven combinations. First, ‘the big four”: EUR/USD, USD/JPY, USD/CHF, and GBP/USD. Secondly, the most popular of the so-called ‘commodity’ types: USD/CAD, AUD/USD, and NZD/USD. As you see, this group has a valuation against the US Dollar.
Different traders include various additional combos. These feature other counter currencies, and they are also referred to as ‘cross currencies’. Such combinations as GBP/EUR, EUR/CHF, and EUR/JPY may also qualify as majors for some brokers.
It is important to understand that Forex majors do not always have the most impressive circulation volumes. Instead, they are regarded as the more conventional choices for the exchange. For instance, the AUD/USD pair does not qualify as ‘major’, but it is among the most traded pairs worldwide.
Key Takeaways
The Major Pairs in Forex: The EUR/USD, USD/JPY, GBP/USD, and USD/CHF are the most important currency pairs on the forex market.
The (commodity) major currency pairs the: (USD/CAD, AUD/USD, and NZD/USD), are the 4 most actively traded pairs in the world.
The EUR/USD is by far the most traded currency pair in the world, and speculators like it because it trades so much every day.
The 8 Major Pairs
- EUR/USD (Euro / Dollar)
- GBP/USD (Pound / Dollar)
- USD/CHF (Dollar / Swiss Franc)
- USD/JPY (Dollar / Yen)
- USD/CAD (Dollar / Canadian Dollar)
- AUD/USD (Australian dollar / Dollar)
- NZD/USD (New Zealand Dollar / Dollar)
Specifics of EUR/USD
Due to being the most popular choice, it has the highest liquidity overall. FX brokers also tend to keep their spreads tight. On the other hand, since both currencies have the largest global economies behind them, they are relatively stable. If the current Ask price for the combo is 1.2600, this means 1 Euro will cost its buyer 1.26 US Dollars.
However, if volatility did not exist, traders would have no way of profiting from the activity. For instance, fluctuations tied to the Brexit controversy and trade war between the United States and China were obvious. As a trader, you can view charts detailing recent movements in these currency values on your digital trading platform.
Specifics of GBP/USD
The price shows how many US dollars one pound is currently worth. The nickname ‘cable’ refers to the cables once used for transmitting price data between New York and the UK capital. Interestingly, the name ‘Fiber’ for EUR/USD is merely an ‘upgrade’ from the old-school ‘Cable’! The combo is most liquid at 2 p.m. (UK time). This is when trading in both cities overlaps the most.
NickNames of the Majors Currency Pairs
Here are the other eight pairs commonly viewed as ‘majors’.
- GBP/EUR (Chunnel)
- EUR/CHF (Euro-Swisse)
- EUR/JPY (Yuppy)
- USD/CAD (Loonie)
- USD/CHF (Swissie)
- USD/JPY (Gopher)
- AUD/USD (Aussie)
- NZD/USD (Kiwi)
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Alexandra is a professional writer with an extensive background in the financial markets. Alexandra started out in the financial industry in 2011 and trades forex, stocks, and cryptocurrencies.
Alexandra also writes technical and fundamental market analyses. Alexandra also tests forex brokers’ trading platforms and crypto exchanges and writes forex broker reviews.