The foreign exchange market, also known as Forex, is the world’s largest financial market where currencies are traded against each other. When trading Forex, you’re essentially speculating on the relative value of one currency compared to another. Major Forex Pairs represent the most actively traded currencies globally, offering high liquidity and significant impact on the overall market.
Understanding the Majors:
This table provides a quick reference for the seven major Forex pairs:
- Euro/US Dollar: EUR/USD – The Euro (EUR), representing the European Union, versus the US Dollar (USD), the world’s reserve currency.
- US Dollar/Japanese Yen: USD/JPY – The US Dollar (USD) versus the Japanese Yen (JPY), a popular safe-haven currency.
- British Pound/US Dollar: GBP/USD – The British Pound (GBP) versus the US Dollar (USD), reflecting the economic strength of the UK.
- US Dollar/Swiss Franc: USD/CHF – The US Dollar (USD) versus the Swiss Franc (CHF), another safe-haven currency known for stability.
- Australian Dollar/US Dollar: AUD/USD – The Australian Dollar (AUD) versus the US Dollar (USD), often influenced by commodity prices.
- US Dollar/Canadian Dollar: USD/CAD – The US Dollar (USD) versus the Canadian Dollar (CAD), closely linked to the US economy and oil prices.
- New Zealand Dollar/US Dollar: NZD/USD – The New Zealand Dollar (NZD) versus the US Dollar (USD), a riskier currency often tied to global risk sentiment.
Explore the complete list of major currency pairs and their real-time quotes on TradingView.
Delving Deeper into Each Pair:
Let’s explore each major forex pair in detail:
EUR/USD (Euro/US Dollar): This pair is often referred to as “the Euro” and represents the most traded currency pair globally. The Eurozone economy and US economic performance significantly influence this pair’s movements.
USD/JPY (US Dollar/Japanese Yen): Nicknamed “the Yen,” this pair reflects the health of the US economy compared to the Japanese economy. The Yen is also seen as a safe-haven currency during times of market uncertainty.
GBP/USD (British Pound/US Dollar): Often called “the Cable,” this pair is influenced by factors like UK interest rates, political stability, and the relative performance of the US and UK economies.
USD/CHF (US Dollar/Swiss Franc): The “Swissy” is known for its stability and is another popular safe-haven currency. The health of the Swiss economy and global risk sentiment play a major role in this pair’s movement.
AUD/USD (Australian Dollar/US Dollar): The “Aussie” is closely tied to commodity prices, particularly commodities like gold and copper that Australia exports. Changes in risk appetite and global economic growth can also affect this pair.
USD/CAD (US Dollar/Canadian Dollar): The “Loonie” is heavily influenced by oil prices as Canada is a major oil producer. Interest rate differentials between the US and Canada also impact this pair.
NZD/USD (New Zealand Dollar/US Dollar): The “Kiwi” is another commodity-linked currency, with dairy exports being a significant factor. The overall risk environment and monetary policy decisions in New Zealand and the US influence this pair.