Currency Pair (2024)

FAQs

Currency Pair? ›

A currency pair is the quotation of two different currencies, with the value of one currency being quoted against the other. The first listed currency of a currency pair is called the base currency, and the second currency is called the quote currency.

Major forex pairs FAQ's

Here they are: EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, USD/CAD, and NZD/USD. These pairs involve the world's most traded currencies and are known for their liquidity and stability.

A typical currency pair listing may appear as, EUR/USD 1.3045. In this example, the euro (EUR) is the base currency, and the U.S. dollar (USD) is the quote currency. The difference between the two currencies is a ratio price. In the example, one euro will trade for 1.3045 U.S. dollars.

You would buy the pair if you expected the base currency to strengthen against the quote currency, and you would sell if you expected it to do the opposite. The price of a forex pair is how much one unit of the base currency is worth in the quote currency.

A currency pair is considered a price quote between two different currencies within the foreign exchange market. The first listed currency within a currency pair is called the base, while the second currency that is the benchmark is called the quote.

The traded currency pairs consist of AUD/USD, EUR/JPY, EUR/USD, GBP/USD, USD/CAD, USD/CHF, USD/HKD, USD/JPY, USD/SGD, NZD/USD and EUR/GBP; trading instruments include spot, forward, swap, cross currency swap, and interest rate swap.

The major currency pairs on the forex market are the EUR/USD, USD/JPY, GBP/USD, and USD/CHF. The four major currency pairs are some of the most actively traded pairs in the world, along with the so-called commodity currency pairs: USD/CAD, AUD/USD, and NZD/USD.

What are the nicknames for currency pairs? ›

The following nicknames are common: "Swissy" or "Euro-Swissy" for EUR/CHF, Fiber for EUR/USD, Chunnel for EUR/GBP, Loonie and The Funds for USD/CAD, Aussie for AUD/USD, Gopher for USD/JPY, Guppy for GBP/JPY, Yuppy for EUR/JPY pairing.

Exotic currency pairs involve one major currency and one currency from a smaller or less commonly traded economy. These pairs typically have lower liquidity and higher spreads, making them riskier for traders. USD/TRY - US Dollar/Turkish Lira. EUR/TRY - Euro/Turkish Lira. USD/SGD - US Dollar/Singapore Dollar.

GBP/USD. The most traded currency pair in the world is actually the GBP/USD, that is, the Cable. GBP and USD are the two most popular and liquid major currencies in the world. Thanks to its tight spreads and limited fluctuations, the GBP/USD is an ideal currency pair for beginner traders.

Their ability to decide what currency pairings to distribute and what bid-ask prices to set allows them to heavily influence specific sectors and tip the scales in their favour. So, while many regulations are set to prevent it, market makers manipulate forex through various means to increase their profitability.

The forex market is usually most active when the market hours overlap between sessions, as this is when the number of traders buying and selling each currency increases. The overlap windows for exchanges are: 1 pm to 4 pm (UTC) when both New York and London exchanges are open.

American paper currency comes in seven denominations: $1, $2, $5, $10, $20, $50, and $100. The United States no longer issues bills in larger denominations, such as $500, $1,000, $5,000, and $10,000 bills. But they are still legal tender and may still be in circulation.

The countries that form the G7 include Canada, France, Germany, Italy, Japan, the United Kingdom and the United States and their five corresponding currencies: the Canadian dollar (CAD), the euro (EUR), the Japanese yen (JPY), the British pound (GBP) and the American dollar (USD).