Some currency pairs are more liquid than others, in theory, making it easier to trade. Below you’ll find information about the most common and bulkcurrency pairs in circulation, and you’ll also find plenty of information available online about each of these pairs, if you want to do more research.
A currency pair that does not contain usdollar as one of its currencies is called the cross-exchange rate ” or “intersections” of common crosspairs (EUR/JPY) (EUR/JPY), GBP/JPY (GBP/JPY) and EUR/GBP (EUR/GBP).
There are approximately eight pairs of major currencies that share the US dollar in a currency pair. If the U.S. dollar is not a currency in the pair, the currency pair is not considered one of the major pairs.
The EURO-USD pair is the most widely traded currency pair in the market and includes the currencies of two of the world’s largest economies. Because they have huge liquidity, they are somewhat less volatile than other currency pairs, however, traders should be aware that even the most liquid pairs can become volatile under certain circumstances.
The currency pair (USD/JPY) is the second most traded currency after EUR/USD. In general, the USD/JPY pair has very high liquidity, yet the JPY is seen as a safe haven in periods of global economic instability. However, political and economic events in China and Korea have a significant impact on the Japanese yen, which is called the “Gateway of the East.”
The GBP/USD is known as the “cable” because it was the first currency pair to be traded over telephone lines, or cables that cross the Atlantic. The United Kingdom and the United States are among the largest Western economies and share strong trade relations. The continuing uncertainty arising from the UK’s exit from the European Union has therefore led to increased price volatility for the pair. Sterling is also trading very heavily against the euro, as reflected in the EUR/GBP pair.
The USD/CAD currency pair is called “color” The Canadian dollar is strongly linked to commodity trading, as Canada is one of the largest exporters of oil, minerals and grains. As a result, international trade flows in these commodities lead to strong liquidity for the USD/CAD pair, however, such commodities also suffer from high-level volatility.
This is AUD/USD, which at certain times in history, ranks third in the list of the most common currency pairs. Just like Canada, Australia is a major exporter of goods such as natural gas, coal, iron and agricultural products. As a result, international trade flows in these commodities lead to strong liquidity for aud/USD, yet such commodities also suffer from high volatility.