The foreign exchange market, or forex, is a decentralized market where currencies are traded 24 hours a day, five days a week. The market is divided into three major trading sessions: the Asian, European, and North American sessions. The Asian trading session is the first to open, starting at 7 pm EST and lasting until 4 am EST. This session is known for its low volatility, which makes it an attractive trading session for beginners and experienced traders alike. In this article, we will discuss which forex pairs trade the Asian market best.
The Asian market is dominated by the Japanese yen (JPY), Australian dollar (AUD), and New Zealand dollar (NZD). These three currencies are heavily traded during the Asian session due to their close proximity to the region, economic ties, and market liquidity. The following forex pairs are the most actively traded during the Asian session:
1. USD/JPY: The USD/JPY is the most actively traded forex pair during the Asian session, accounting for 17% of the total forex market volume. This pair is popular due to the high liquidity of the Japanese yen and the US dollar. The USD/JPY is also influenced by the Bank of Japan’s monetary policy and the US Federal Reserve’s interest rate decisions.
2. AUD/USD: The AUD/USD is the second most actively traded forex pair during the Asian session, accounting for 7% of the total forex market volume. The Australian dollar is closely tied to the Asian region due to Australia’s strong economic ties with China, Japan, and South Korea. The AUD/USD is also influenced by commodity prices, as Australia is a major exporter of commodities such as iron ore and coal.
3. NZD/USD: The NZD/USD is the third most actively traded forex pair during the Asian session, accounting for 3% of the total forex market volume. The New Zealand dollar is also closely tied to the Asian region, with New Zealand’s strong economic ties with Australia and China. The NZD/USD is also influenced by commodity prices, as New Zealand is a major exporter of dairy products.
4. USD/CHF: The USD/CHF is the fourth most actively traded forex pair during the Asian session, accounting for 3% of the total forex market volume. The Swiss franc is seen as a safe-haven currency, which makes it popular during times of market volatility. The USD/CHF is also influenced by the Swiss National Bank’s monetary policy and the US Federal Reserve’s interest rate decisions.
5. USD/CAD: The USD/CAD is the fifth most actively traded forex pair during the Asian session, accounting for 3% of the total forex market volume. The Canadian dollar is closely tied to the US economy due to Canada’s strong trade links with the US. The USD/CAD is also influenced by commodity prices, as Canada is a major exporter of oil.
In conclusion, the forex pairs that trade the Asian market best are the USD/JPY, AUD/USD, NZD/USD, USD/CHF, and USD/CAD. These pairs are heavily traded during the Asian session due to their close proximity to the region, economic ties, and market liquidity. Traders who are looking to trade during the Asian session should consider these forex pairs as they offer the best opportunities for profitable trades. However, traders should also be aware of the risks involved in forex trading and should always trade with caution.
