The most advanced market is the Forex market. It is understandable why it is also the most liquid and traded. However, have you ever pondered which forex pairings are most frequently traded? And what is the loudest pair?
Among the many currency pairs that are exchanged in the world of forex trading, a few become well-known due to their high trading volume. Let’s take a closer look at these leading pairs.
EUR/USD – Fiber
The EUR/USD combination, which combines the two most powerful economies in the world—the US and the EU—is at the forefront of Forex trading. This pair, which accounts for roughly 28% of the volume of the entire forex market, is heavily traded due to its liquidity, which causes spreads to get tighter.
USD/JPY – The Ninja
The USD/JPY, often called the “Ninja” or “the Gopher,” stands as the second in the list of most traded forex pairs. Comprising roughly 13% of global forex trades, this pair’s popularity stems from the Japanese yen’s status as the most traded currency in Asia. Its liquidity and unique market dynamics, such as its positive correlation with USD/CHF, render it an attractive choice for traders seeking diverse opportunities.
GBP/USD – The Cable
Known as “cable,” the GBP/USD combination makes up around 10% of all forex transactions. With roots in the transatlantic cables that linked London and New York, this pair has historical significance. The movements of the pair offer traders special chances to profit from changes in the value of the US dollar relative to the British pound, particularly during economic downturns.
AUD/USD – The Aussie
The AUD/USD pair, or “Aussie,” takes the fourth place in the most traded forex pairs, contributing about 5.5% to the total forex trade volume. The Australian dollar’s strong correlation with the country’s commodity exports, particularly raw materials, plays a significant role in its valuation. This link offers traders the opportunity to gauge the pair’s strength based on global commodity price movements.
USD/CAD – The Oil Connection
Because of Canada’s export nature, the USD/CAD pair is similar to the Australian dollar in relation to commodity prices, particularly those of oil. The Canadian dollar is directly impacted by changes in oil prices, which account for around 4.4% of the volume of the foreign exchange market. The movements of this pair provide information about how the US dollar interacts with currencies that are based on commodities.
These five currency pairs—USD/CAD, USD/EUR, USD/JPY, GBP/USD, and AUD/USD—are not merely well-liked by traders. Each of them reflects the intricate interdependencies of the world’s economy and accounts for more than 60% of the volume of the FX market. It is essential for traders to comprehend the dynamics of these most traded currency pairs in order to successfully navigate the currency market.