Discover the most traded forex pairs and learn what makes each of them unique.
Understanding the most traded currency pairs is important in forex trading. Traders focus on popular forex pairs (คู่ เงิน forex ยอด นิยม) that provide better liquidity and tighter spreads. It also includes more predictable price behavior compared to less common pairs. It is important to understand why these pairs are so widely traded and what makes each one unique in the global financial market.
Why do currency pairs matter in Forex trading?
Currencies are always traded in pairs because the value of one currency is measured against another in Forex. The “base currency” is the first in the pair. The “quote currency” is the second. A new currency trader can easily understand this pair by reading the example.
For example:
In EUR/USD, the EUR is the base, and the USD is the quote.
Traders profit by guessing whether the base currency will strengthen or weaken against the quote currency.
The high trading volume of some pairs makes them more attractive. The high liquidity means tighter spreads and faster execution, which are important for:
- day traders
- long-term investors
Major Forex pairs
With so many FX pairs available in the market, some of the most traded are discussed here.
EUR/USD
The EUR/USD is the most traded pair in the world. It represents the eurozone economy against the U.S. economy, which is among the largest globally. This pair is highly liquid, making it popular among beginners and professionals in trading. The price movements of EUR/USD are influenced by economic reports from the following:
- European Central Bank (ECB)
- Federal Reserve
- Geopolitical events
USD/JPY
The USD/JPY is another highly traded pair, favored for its volatility. The yen is a safe-haven currency, especially in times of global uncertainty. Interest rate decisions by the Bank of Japan and U.S. economic indicators drive the price movements of this pair.
GBP/USD
GBP/USD is known as “Cable,” this pair is one of the oldest traded in forex history. It has a higher volatility compared to EUR/USD, providing more trading opportunities. The economic developments in the UK, regarding inflation and monetary policy affect this pair.
USD/CHF
The Swiss franc is another safe-haven currency, making the USD/CHF pair attractive during times of global instability. The strong banking system and political neutrality of Switzerland make the franc a stable choice of currency pair. Traders use this pair to hedge against risk.
AUD/USD
The AUD/USD is heavily influenced by commodity prices, particularly:
- gold
- iron ore
Since Australia is a major exporter of these resources, it is the best pair with USD. Traders watch economic data from the Reserve Bank of Australia and the U.S. Federal Reserve when trading this pair.
USD/CAD
The Canadian dollar is known as a “commodity currency” because its value is linked to oil prices, one of the top exports in Canada. The USD/CAD pair is heavily affected by shifts in global energy markets, making this pair good for traders who monitor crude oil trends.
Why do traders focus on the most traded pairs?
Liquidity is the main advantage of trading more traded pairs. The high liquidity means smaller transaction costs and better order execution. Traders can easily follow trends and develop strategies with the availability of the following:
- Data
- News coverage
- Analysis
These pairs manage to react more predictably to global events compared to exotic pairs, which are less liquid and more volatile.
Conclusion
All levels of traders consider focusing on the most traded pairs to provide a strong foundation for success in the market. Understanding what drives each pair with combined technical analysis and deep understanding of economic fundamentals moves these currencies.