Forex trading is the simultaneous buying of one currency and selling another. Currencies are traded through a Broker or Market Maker, and are traded in pairs; for example the euro and the U.S. dollar (EUR/USD) or the British pound and the Japanese yen (GBP/JPY).
Major Currency Pairs
The currency pairs listed below are considered the “majors”. These pairs all contain the U.S. dollar (USD) on one side and are the most frequently traded. The majors are the most liquid and widely traded currency pairs.
Pair |
AKA |
EUR/USD |
euro dollar |
USD/JPY |
dollar yen |
GBP/USD |
cable |
USD/CHF |
swissy |
USD/CAD |
loonie |
AUD/USD |
aussie |
NZD/USD |
kiwi |
Major Cross-Currency Pairs or Minor Currency Pairs
Currency pairs that don’t contain the U.S. dollar (USD) are known as cross-currency pairs or simply as “crosses.” Major crosses are also known as “minors.” The most actively traded crosses are derived from the three major non-USD currencies: EUR, JPY, and GBP.
Euro Crosses
Pair |
EUR/CHF |
EUR/GBP |
EUR/CAD |
EUR/AUD |
EUR/NZD |
Yen Crosses
Pair |
AKA |
EUR/JPY |
yuppy |
GBP/JPY |
guppy |
CHF/JPY |
swissy yen |
CAD/JPY |
loonie yen |
AUD/JPY |
aussie yen |
NZD/JPY |
kiwi yen |
Pound Crosses
Pair |
AKA |
GBP/CHF |
pound swissy |
GBP/AUD |
pound aussie |
GBP/CAD |
pound loonie |
GBP/NZD |
pound kiwi |
Other Crosses
Pair |
AKA |
AUD/CHF |
aussie swissy |
AUD/CAD |
aussie loonie |
AUD/NZD |
aussie kiwi |
CAD/CHF |
loonie swissy |
NZD/CHF |
kiwi swissy |
NZD/CAD |
kiwi loonie |
Exotic Pairs
Exotic pairs are made up of one major currency paired with the currency of an emerging economy, such as Brazil, Mexico, or Hungary.
Pair |
AKA |
USD/HKD |
|
USD/SGD |
|
USD/ZAR |
dollar rand |
USD/THB |
dollar baht |
USD/MXN |
dollar peso |
USD/DKK |
dollar krone |
USD/SEK |
|
USD/NOK |
Depending on your broker, you may see the exotic pairs above.
Consider that these pairs aren’t as heavily traded as the “majors” or “crosses,” so the transaction costs associated with trading these pairs are usually bigger. Usually spreads will be considerably higher than that of the majors EUR/USD or USD/JPY and liquidity could also be restricted depending on when and where you are trading.