Top 10 Most Traded Forex Currency Pairs
Contents
Before starting trading, almost every trader thinks of the best forex currency pairs to trade; they somehow get the point that forex is the world’s most complex market, with hundreds of currency combinations to choose from. To simply understand things, we are going to explain every currency match here in this blog.
What Are The Most Traded Forex Currency Pairs In The World?
- EUR/USD (euro/US dollar)
- USD/JPY (US dollar/Japanese yen)
- GBP/USD (British pound/US dollar)
- AUD/USD (Australian dollar/US dollar)
- USD/CAD (US dollar/Canadian dollar)
- USD/CNY (US dollar/Chinese renminbi)
- USD/CHF (US dollar/Swiss franc)
- USD/HKD (US dollar/Hong Kong dollar)
- EUR/GBP (euro/British pound sterling)
- USD/KRW (US dollar/South Korean won)
Forex Currency Pairs:
In the forex market, currencies are always traded in pairs because when you buy or sell one currency, you automatically buy or sell another one. In forex currency pairs, there is a base currency and a quote currency. The base currency appears first, and then the quote currency is the right pair for it.
The price displayed for a currency pair represents the amount of quote currency you will need to spend in order to purchase one unit of the base currency. For example, in the EUR/USD currency pair, EUR is the base currency, and USD is the quote currency (perfect match currency). If the quote price was 1.2000, it means 1 euro is worth 1.20 USD.
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Different Types of Forex Currency Pairs:
Considerably speaking, forex currency pairs can be separated into three categories. These are the majors, the commodity currencies, and the cross currencies:
1. Major Currencies:
Major currencies are the most traded forex currency pairs in the forex markets. Opinions differ on how many major currency pairs there are, but most lists will include EUR/USD, USD/JPY, GBP/USD, and USD/CHF.
2. Commodity Currencies:
Constitute a currency pair that has a value closely tied to a commodity such as oil, coal, or iron ore. The commodity currencies included in the list above are AUD/USD and USD/CAD.
3. Cross Currencies:
Cross currencies are currency pairs that do not include the US dollar. Two cross-currency pairs have made it into the top ten; these are EUR/GBP and EUR/JPY.
EUR/USD:
EUR/USD is the most traded currency pair on the forex market, with EUR/USD transactions making up to 24.0% of daily forex trades in previous years. The popularity of the EUR/USD pair comes from the fact that it is representative of the world’s two biggest economies: the European single market and the US.
The spiked daily volume of EUR/USD transactions guarantees that the pair has a lot of liquidity, which generally results in tight spreads. Liquidity and tight spreads are enticing for traders because they mean that large trades can be made with little impact on the market.
The exchange rate of EUR/USD is determined by several factors, not least of which are interest rates set by the European Central Bank (ECB) and the Federal Reserve (Fed). This is because the currency with the higher interest rates gives a better return on its initial investment. If, for example, the ECB had set higher interest rates than the Fed, the euro would likely appreciate relative to the dollar.
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USD/JPY:
Also famous as “the gopher,” the USD/JPY currency pair is made up of the US dollar and the Japanese yen. It is the second most traded forex pair on the market, representing 13.2% of all daily transactions in previous years.
Just like EUR/USD, USD/JPY is known for its high liquidity, something it gets from the fact that the yen is the most heavily traded currency in Asia, and the US dollar is the most common and famous forex currency pair traded in the world.
In the same way as the Fed and ECB, the Bank of Japan (BoJ) sets the interest rates for the Japanese economy, which, in turn, affects the value of the yen relative to the US dollar.
GBP/USD:
The currencies in this pair are the pound sterling and the US dollar. GBP/USD is normally called” cable” on account of the deep-sea cables that are used to deliver the bid and ask quotes between London and New York. In previous years, the record of this pair made up 9.6% of all daily forex transactions.
Like with most other currency pairs, the strength of GBP/USD comes from the respective strength of the British and American economies. If the British economy is growing at a faster rate than that of the American, itis likely the pound will strengthen against the dollar. However, if the American economy is doing better than the British economy, the reverse is true. Just like the top two most popular currency pairs on this list, the quote price of GBP/USD is affected by the respective interest rates set by the Bank of England (BoE) and theFed. The following difference between the interest rates on the pound and dollar can have a great effect on the price of the GBP/USD currency pair.
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AUD/USD
This pair is also referred to as the “Aussie”, describing the Australian dollar against the US dollar. It made up 5.4% of daily forex trades in previous years. The value of the Australian dollar is tied closely to the value of its exports, with metal and mineral exports such as iron ore and coal accounting for a large proportion of the country’s gross domestic product (GDP).
A collapse in the value of these commodities on the world market would likely cause a reciprocal collapse in the value of the Australian dollar. In the case of the AUD/USD currency pair, this means the US dollar would become stronger, so it would cost fewer US dollars to buy one Australian dollar.
USD/CAD
Commonly known as “loonie” on account of the loon bird, which is drawn on Canadian coins, and it represents the pairing of the US dollar and the Canadian dollar. Previous years’ record of USD/CAD showed 4.4% of daily forex trades. The strength of the Canadian dollar is linked to the price of oil because it’s Canada’s main export.
Since oil, in the world market, is priced in US dollars, Canada can earn a large supply of US dollars through its oil exports. If the price of oil rises, it most likely will raise the value of the Canadian dollar compared to the US dollar. In such cases, traders keep an eye on the Brent Crude and US Crude, because any fluctuation in the oil market will likely resonate with the exchange rate of this forex pair.
USD/CNY
It is the partnership of the US dollar and the Chinese renminbi, also known as “ Yuan,” that represented around 4.1% of daily forex trades in previous years.
The yuan forex currency pairs are affected big time, especially after the US-China trade war. This is a part of the Chinese government, which lets the yuan decline to make the country’s exports cheaper and increase its market share in countries other than the US.
However, you can trade the USD/CNH (offshore) currency pair, which is traded outside of mainland China. CNH has not been as tightly controlled as CNY (onshore), which means it can be more explosive, and this instability can make it the best choice for speculative trading.
USD/CHF
This is a pair of US dollars and Swiss Francs, also known as “Swissies”. This is a popular currency pair because the Swiss financial system has a history of being a safe place for investors and their funds.
Which is why traders usually turn to the CHF during times of increasing market sensitivity, but the Swiss franc sees less interest from traders during times of greater market stability. During times of increased fluctuations, it is more likely that the price of these forex currency pairs would drop as the CHF strengthens against the USD after experiencing increased investment. Even after being traded only as a safe option, this pair made up for 3.6% of all daily forex transactions in previous years.
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USD/HKD
It is a pair of US dollars and Hong Kong dollars. Over the years, this pair’s trading volume has ranged from 1.5%to 3.3% of daily forex transactions.
The value of the Hong Kong dollar is tied to the US dollar in a very special system known as a linked exchange rate. The Hong Kong dollar is allowed to fluctuate within a band of HK$.75 TO HK$7.85 to US$1, and traders can take advantage of any price movements within this band.
EUR/GBP
One of the most difficult currency pairs to make correct predictions of is the Euro and the British Pound. This is because EUR and GBP have a strongly linked history of the UK and Europe, and strong trade ties between these two economies.
Regardless of the difficulty in prediction, EUR/GBP transactions made up 2.0% of daily trades in previous years, making it the 9th among most traded currency pairs.
For other pairs, traders need to keep an eye on the ECB and BoE announcements, which could affect the exchange rates of the euro and pounds, which would increase volatility further. After Brexit, this currency pair fluctuated quietly and unpredictably. High volatility can attract the traders, but a risk management strategy is needed before opening a position in sensitive market conditions.
USD/KRW
It is the tenth pair in the list of the best forex currency pairs to trade, the US dollar against the Korean won. Previously, these forex currency pairs made up 1.9% of daily transactions, and in 201 this pair made it into the list of top ten forex currency pairs.
The economic growth of South Korea, especially after the Korean War in 1953, became impressive. The growth is now being capitalized on, and South Korea enjoys membership of the United Nations, the Organization for Economic Co-operation and Development (OECD), making it a country and currency an exciting opportunity for many market participants.
Conclusion:
Trading is not always safe; with that being said, we mean you either lose your funds or gain profit. The main thing is you stick to your plan, don’t make any rebellious decisions, excessive investment, especially when the market is not moving in your favour. You get benefits when you move strategically, rather than making decisions irrationally.
Now that the basics are all discussed in our blogs, as a beginner and someone who needs directions, you are ready to move forward with your trading decision, but still, if you have any queries or misunderstandings, we are happy to discuss, so reach out to us at your convenience, because we love to see you maximize your investments.
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✍️ Author’s Bio
This article is written by ForexDrift’s Market Research & Strategy Team, working closely with professional traders, risk analysts, and capital managers to evaluate copy trading and Forex investment models. Using real performance data, live market testing, and transparent risk frameworks, our experts provide practical insights that help investors choose strategies aligned with their financial goals and risk tolerance.
