Forex, also known as foreign exchange, is a decentralized global market where traders exchange currencies. Forex trading involves buying one currency and selling another currency simultaneously, with the goal of profiting from the exchange rate difference. The forex market is the largest financial market in the world, with a daily trading volume of over $5 trillion.
The forex market consists of various currencies, each of which has its own value in relation to other currencies. There are numerous currencies traded in the forex market, but some currencies are considered major currencies due to their high trading volume and liquidity. Major currencies are also known as the “majors.”
So, how many major currencies are there in forex? The answer to this question can vary depending on the definition of major currencies. However, there are generally seven major currencies in forex, which are as follows:
1. US Dollar (USD)
The US dollar is the most widely traded currency in the world, and it is the official currency of the United States. The US dollar is the world’s primary reserve currency, and it is involved in approximately 88% of all forex transactions.
2. Euro (EUR)
The euro is the official currency of the European Union, and it is the second-most traded currency in the world. The euro is involved in approximately 32% of all forex transactions.
3. Japanese Yen (JPY)
The Japanese yen is the official currency of Japan, and it is the third-most traded currency in the world. The Japanese yen is involved in approximately 16% of all forex transactions.
4. British Pound (GBP)
The British pound is the official currency of the United Kingdom, and it is the fourth-most traded currency in the world. The British pound is involved in approximately 13% of all forex transactions.
5. Swiss Franc (CHF)
The Swiss franc is the official currency of Switzerland, and it is the fifth-most traded currency in the world. The Swiss franc is involved in approximately 5% of all forex transactions.
6. Canadian Dollar (CAD)
The Canadian dollar is the official currency of Canada, and it is the sixth-most traded currency in the world. The Canadian dollar is involved in approximately 4% of all forex transactions.
7. Australian Dollar (AUD)
The Australian dollar is the official currency of Australia, and it is the seventh-most traded currency in the world. The Australian dollar is involved in approximately 3% of all forex transactions.
These seven currencies are considered major currencies because they have the highest trading volume and liquidity in the forex market. They are also widely accepted as reserve currencies by central banks around the world. As a result, major currency pairs involving these currencies are the most actively traded in the forex market.
In addition to these seven major currencies, there are also other currencies that are considered minor currencies or exotic currencies. Minor currencies are those that are not as widely traded as the majors, but they still have a significant impact on the forex market. Exotic currencies are those that are not as widely traded as the majors or minors, and they are often associated with emerging market economies.
In conclusion, there are seven major currencies in forex, which are the US dollar, euro, Japanese yen, British pound, Swiss franc, Canadian dollar, and Australian dollar. These currencies have the highest trading volume and liquidity in the forex market, and they are widely accepted as reserve currencies by central banks around the world. Traders in the forex market often focus on major currency pairs involving these currencies, as they are the most actively traded and provide the most opportunities for profit.
