Forex, also known as the foreign exchange market, is the largest financial market in the world. It is where currencies are traded 24 hours a day, five days a week. The forex market is highly liquid and has a daily turnover of over $5 trillion. In forex trading, traders buy and sell currencies, hoping to profit from the fluctuations in exchange rates.
There are many currency pairs in the forex market, but not all of them are considered major pairs. A major pair is a currency pair that includes the US dollar (USD) and one of the seven other major currencies. These major currencies include the Euro (EUR), Japanese yen (JPY), British pound (GBP), Swiss franc (CHF), Canadian dollar (CAD), Australian dollar (AUD) and New Zealand dollar (NZD).
In total, there are seven major currency pairs in the forex market. These major pairs are the most widely traded and most liquid pairs in the forex market. They account for about 85% of the total forex market trading volume.
1. EUR/USD: The EUR/USD is the most widely traded currency pair in the forex market. It represents the exchange rate between the Eurozone’s Euro and the US dollar.
2. USD/JPY: The USD/JPY represents the exchange rate between the US dollar and the Japanese yen. It is the second most traded currency pair in the forex market.
3. GBP/USD: The GBP/USD represents the exchange rate between the British pound and the US dollar. It is also known as the “cable” due to the fact that the exchange rate was once transmitted across the Atlantic via a cable.
4. USD/CHF: The USD/CHF represents the exchange rate between the US dollar and the Swiss franc.
5. USD/CAD: The USD/CAD represents the exchange rate between the US dollar and the Canadian dollar.
6. AUD/USD: The AUD/USD represents the exchange rate between the Australian dollar and the US dollar.
7. NZD/USD: The NZD/USD represents the exchange rate between the New Zealand dollar and the US dollar.
Traders often focus on trading major currency pairs as they have high liquidity and lower spreads compared to minor and exotic currency pairs. Moreover, major currency pairs are more predictable and have lower risk due to their stable economies.
In conclusion, there are seven major currency pairs in the forex market. These major pairs include EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD and NZD/USD. They are the most widely traded and most liquid pairs in the forex market, accounting for about 85% of the total forex market trading volume. Traders often focus on trading major currency pairs due to their high liquidity, lower spreads, and more predictable nature.
