3 Major Currency Pairs That You Should Know About
The forex major currency pairs consist of a collection of currencies which are most commonly traded in the forex market. Because these currency pairs are so frequently traded and extremely popularly exchanged, the trading price bands are typically wider but –just like any other currencies – they still greatly react to the overall volatility of the global market. This means that no single pair is safe from being affected by the ups and downs of the market; each currency pair has to weather both bullish and bearish periods within the trading day. There are four major currency pairs in this market.
USD/JPY (USD/JPY) This pair is the most widely traded in the world with over trillion dollars moving around each day. The US dollar is the base currency for this global financial market, which also acts as the international reserve currency. The US dollar is highly appreciated in comparison to many other currencies, making it a great investment opportunity as well as a safe haven for investors. The two major currency pairs USD/CHF (the CHF stands for the Canadian Dollar) and USD/EUD (the Eurodollar) have been almost constantly on a winning streak, together averaging about a gain of more than 4% over the course of history. When these trends are seen, it’s usually a good idea to make some money as long as possible.
EUR/USD (EUR/USD) This is another pair of forex major currency pairs that has consistently performed well during the last years. This type of currency pair is generally the most widely traded currency pairs across the globe with about trillion dollars moving around every day. Because of the fact that there are several currencies involved (bottlers), the fluctuations can become quite extreme. Trading this forex currency pairs involves a lot of risk though, so only people who are experienced in forex trading should try their luck here.
USD/JPY (the USD and JPY) USD/JPY stands for the U.S. dollar and Japanese yen and represents the most common major currency pairs in the world. The two different currencies will change according to what the world economy is doing at any given time. The most bullish of these currency pairs is the USD and JPY because the two currencies are valued quite highly when there are strong economies and robust growth in these countries. The two different currencies also appreciate and depreciate when there is an economic slowdown or a war going on.
EUR/CHF (the Euro and CHF) This particular pair of forex currencies was not originally designed as a trading pair. It actually stands for the Euro and the Swiss mark. In the past, trading this pair meant you traded the Euro directly against the Swiss mark which was rather difficult. Nowadays, it is possible to trade this pair because there are many Swiss banks that trade the EUR/CHF.
USD/EUR (the US dollar and the Euro) The EUR/USD is another one of the popular forex pairs used in trading. Like the USD/JPY, it has been able to obtain high valuations due to its popularity as a currency pair. The biggest reason for this is that the EUR/USD is traded quite extensively over the internet. In fact, there are more traders using this spread than any other form of spread. Traders use this to get the lowest possible bid and ask prices for any given currency pair.
USD/CHF This type of spread shows a lot of similarities with the USD/CAD spread above. The main difference is that the CHF has narrower spreads. It is usually found trading over the OTC market and the smaller spreads can be useful in making trades without facing too much volatility. This is especially important for people who have smaller investment budgets.
USD/JPY This type of spread has been known by Japanese investors for a long time. Many Japanese financial institutions trade the JPY through the Bank of Japan. This is a popular option for people who want lower costs in making currency trades. Traders make use of this spread when they want to trade the Japanese yen. They use the narrower spreads to reduce the cost of their trades and the larger sizes to make big profits when they do win.