Top 10 major currency pairs every trader must know

The forex market is the world’s largest and most liquid financial market. While currency trading dates back to the early days of minting national currencies, it wasn’t until the advent of the Internet that forex evolved into today’s 24/7, real-time global marketplace.

What are major currency pairs and what makes them so important in forex trading?

In the forex market, currencies are always traded in pairs — when you buy one currency, you sell another. The most popular of these are known as major currency pairs, and most include the US dollar (USD) because of its dominant position in the global economy. Nearly 90% of all forex trades each day involve USD pairs.

Other common types of currency pairs include cross pairs (currencies that don’t involve the USD) and commodity pairs (currencies influenced by the price of oil, gold, coal and other key commodities).

Each currency pair is made up of two parts: a base currency and a quote currency.

• Base currency: appears first and represents the currency you’re buying or selling.
• Quote currency: appears second and shows how much you need to spend to buy one unit of the base currency.

Now, let’s explore the 10 most traded currency pairs in the global forex market.

1. EUR/USD

The EUR/USD pair is often seen as the powerhouse of forex trading, representing two of the world’s largest and most influential economies. The US dollar (USD) is the most traded and widely held reserve currency, while the euro (EUR) ranks second, accounting for around 30% of daily forex transactions.

Trading the EUR/USD pair offers exceptional liquidity thanks to its consistently high trading volume. This popularity also leads to tight spreads, the small difference between the bid and ask price, making it the most liquid forex pair in the global market.

2. USD/JPY

The US dollar (USD) and Japanese yen (JPY) form one of the most traded currency pairs in the forex market, accounting for around 13.2% of daily transactions. The yen is Asia’s most traded currency and is widely seen as a symbol of stability in global markets.

With Japan’s historically low interest rates encouraging investments in higher-yielding currencies, the USD/JPY pair offers strong liquidity, making it one of the most actively traded and closely watched pairs in forex trading.

3. GBP/USD

The GBP/USD pair represents the British pound (GBP) and the US dollar (USD). Like the EUR/USD, its strength comes from the scale and stability of the UK and US economies, making it one of the most traded and highly liquid currency pairs in the forex market.

Known as the “cable”, this nickname dates back to the 19th century, when transatlantic telegraph cables were used to transmit bid and ask prices between London and New York, a historical connection that still defines the pair today.

4. USD/CNY

The USD/CNY pair, representing the US dollar and the Chinese yuan (or renminbi), ranks fourth among the most traded currency pairs in forex. Traders watch this pair closely due to China’s growing influence as the world’s second-largest economy by GDP.

While the USD/CNY is less liquid than the top three pairs, China’s expanding role in global trade and investment makes it an important option for traders tracking economic links between Western and Asian markets.

If you plan to trade USD/CNY, it’s essential to stay informed on developments in US–China trade relations, as political and economic news can significantly affect price movements, points in percentage and market performance.

5. USD/CAD

Ranking fifth among the most traded currency pairs in forex, the USD/CAD pair represents the US dollar and the Canadian dollar. The strength of the CAD is closely linked to the price of oil, which is Canada’s primary export.

Typically, higher oil prices boost the Canadian dollar and weigh on the US dollar, as Canada benefits from oil exports while the US, a major oil consumer, faces higher costs. When trading this major currency pair, it’s crucial to monitor US crude and Brent crude prices, as any movement in oil markets can directly influence the USD/CAD exchange rate.

6. AUD/USD

The Australian dollar (AUD) and the US dollar (USD) make up the sixth most traded currency pair in the world. Like the USD/CAD, the AUD/USD is a commodity-linked pair, shaped by Australia’s major exports such as iron ore and coal — key drivers of the nation’s GDP.

Because of its strong ties to global resource demand, traders often use the AUD/USD pair to speculate on wider commodity market trends and shifts in global economic growth.

7. USD/CHF

The USD/CHF pair represents the US dollar (USD) and the Swiss franc (CHF), one of the major currency pairs in forex trading. The pair’s performance is closely tied to Switzerland’s reputation as a global financial safe haven.

During periods of market volatility, traders often turn to the Swiss franc for stability. As demand for the CHF rises, the value of the USD/CHF pair typically falls - reflecting the franc’s strength against the US dollar.

8. USD/HKD

The USD/HKD pair has seen a steady rise in trading popularity over recent years. Daily trade volume increased from 1.3% in 2016 to 3.3% in 2019. According to the Bank for International Settlements (BIS) 2022 Triennial Central Bank Survey of forex and over-the-counter (OTC) derivatives markets, the USD/HKD recorded a daily turnover of around USD 178 billion. The BIS conducts this global survey every three years.

The Hong Kong dollar (HKD) is pegged to the US dollar (USD) through a system known as the linked exchange rate, which allows the currency to fluctuate slightly within a set band of HK$7.75 to HK$7.85 per US$1. This narrow range gives traders opportunities to profit from small, predictable movements in price.

9. NZD/USD

The New Zealand dollar (NZD), often called the “kiwi dollar”, and the US dollar (USD) form one of the major currency pairs in forex trading. The pair’s value is influenced by New Zealand’s key economic sectors - agriculture, tourism and international trade, as well as by global interest rate movements.

When trading the NZD/USD pair, it’s important to monitor monetary policy decisions and interest rate changes from both the US Federal Reserve and the Reserve Bank of New Zealand, as these can significantly affect price movements.

10. USD/KRW

Ranking tenth among the most traded currency pairs in forex, the USD/KRW pair represents the US dollar and the South Korean won. In 2019, it accounted for 1.9% of global forex transactions, marking its first appearance on the list. According to the Bank for International Settlements (BIS) 2022 Triennial Central Bank Survey of forex and over-the-counter (OTC) derivatives markets, the pair recorded a daily turnover of around USD 128 billion.

South Korea’s expanding economy has strengthened its presence in global markets, giving traders and investors new opportunities to engage with Asian currencies beyond Hong Kong, Japan and China.

Trade major currency pairs with Equiti

Understanding what drives major currency pairs provides a strong foundation for making smarter trading decisions. With a disciplined, well-informed approach, supported by continuous learning and advanced trading tools, you’ll be better equipped to navigate the fast-moving forex market.

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