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    Lesson 3: Understanding the currency pairs

    April 1, 2022

    The US Dollar is the most frequently traded currency in the world. As a result, most currencies are quoted against it. However, different types of currency pairs are used when referring to Forex trading, each of which is split into groups depending on the amount of trading activity and liquidity. These are known as majors, minors (or crosses), and exotic pairs.

    Major currency pairs

    The most traded currency pairs in the world are called the majors. They are generally the most liquid and attractive to all types of Forex traders. The EURUSD is the most traded pair, representing nearly 30% of all daily Forex trades on the entire Forex market.

    Currencies not classed as major currencies but are normally traded against a major currency are called minor currencies and crosses.

    EURUSDEuro/US DollarEurozone/United States
    GBPUSDBritish Pound/US DollarUnited Kingdom/United States
    USDJPYUS Dollar/Japanese YenUnited States/Japan
    USDCHFUS Dollar/Swiss FrancUnited States/Switzerland
    USDCADUS Dollar/Canadian DollarUnited States/Canada
    AUDUSDAustralian Dollar/US DollarAustralia/United States
    NZDUSDNew Zealand Dollar/US DollarNew Zealand/United States

    Minor currency pairs and crosses

    Currency pairs that do not contain the US Dollar are known as ‘crosses’. A currency pair involving a major non-US Dollar currency would also be known as a ‘minor currency pair’.

    The most common crosses are pairs derived from the three major non-US Dollar currencies – Euro, Great British Pound, and Japanese Yen. For example, pairs that involve the euro are called ‘euro crosses’. Below is a list of Euro, Pound, Yen, and other crosses.


    EURGBPEuro/British Pound
    EURCHFEuro/Swiss Franc
    EURAUDEuro/Australian Dollar
    EURCADEuro/Canadian Dollar


    GBPAUDBritish Pound/Australian Dollar
    GBPCADBritish Pound/Canadian Dollar
    GBPCHFBritish Pound/Swiss Franc
    GBPNZDBritish Pound/New Zealand Dollar


    GBPJPYBritish Pound/Japanese Yen
    EURJPYEuro/Japanese Yen
    CHFJPYSwiss Franc/Japanese Yen
    CADJPYCanadian Dollar/Japanese Yen
    AUDJPYAustralian Dollar/Japanese Yen
    NZDJPYNew Zealand Dollar/Japanese Yen


    AUDCADAustralian Dollar/Canadian Dollar
    AUDNZDAustralian Dollar/New Zealand Dollar
    AUDCHFAustralian Dollar/Swiss Franc
    CADCHFCanadian Dollar/Swiss Franc
    NZDCADNew Zealand Dollar/Canadian Dollar
    NZDCHFNew Zealand Dollar/Swiss Franc

    Exotic currency pairs

    Trading exotic pairs offer exposure to a wide range of developing and emerging market economies across Asia, the Middle East, and Africa. In general, exotic pairs are not traded as often as majors or crosses, which means they are not very liquid markets and lack consistent market activity.

    There are often pros and cons associated with trading exotic currency pairs. Because they are not so widely traded, they can often be subject to higher trading fees; however, when the market moves, they can be subject to wild price fluctuations (suitable for the more experienced trader).

    Below is a list of some of the main currency pairs referred to when talking about exotic pairs.

    USDSEKUS Dollar/Swedish KronaUnited States/Sweden
    USDNOKUS Dollar/Norwegian KroneUnited States/Norway
    USDTRY                US Dollar/Turkish Lira                     United States/Turkey
    USDMXNUS Dollar/Mexican PesoUnited States/Mexico
    USDZARUS Dollar/South African RandUnited States/South Africa
    USDPLN US Dollar/Polish ZlotyUnited States/Poland
    USDSGDUS Dollar/Singapore DollarUnited States/Singapore


    In Forex, many currency pairs (especially the majors) have particular nicknames which are commonly used in the market. Many even have an exciting story about why they were nicknamed that in the first place. For example, the FX pair GBPUSD is called ‘cable’.

    This dates back to the 19th century when a communications cable ran across the Atlantic Ocean floor to get the exchange rate between the US Dollar and the British Pound.

    In some cases, the currency by itself is known by a different name. For example, the US Dollar is often referred to as the ‘greenback’, while you may hear the British Pound referred to as ‘sterling’.

    Below is a list of the most popular currency pair nicknames.


    USDCHF Swissy

    Currency codes

    Currencies are often abbreviated to a three-letter currency code. The first two letters symbolize the country’s name, while the third is the country’s currency.

    Let’s look at a few examples.

    GBP – ‘GB’ stands for Great Britain, while the ‘P’ stands for Pound

    USD – ‘US’ stands for the United States, the ‘D’ stands for Dollar

    JPY – ‘JP’ stands for Japan, the ‘Y’ stands for Yen

    In trading, you will hear a lot about ‘pips’ and ‘spreads’. Learn about pips in Forex and how different factors can influence spreads.