Some currency pairs are more liquid than others, which generally makes them easier to trade. Highly liquid instruments are typically traded more frequently, resulting in higher trading volumes. Below is a look at the most popular currency pairs with the highest trading volumes.

As a rule of thumb, a currency pair that does not involve the USD is known as a ‘Cross rate’ or ‘Cross.’ Popular Crosses include EUR/JPY (Euro to Japanese Yen), GBP/JPY (Pound to Japanese Yen), and EUR/GBP (Euro to Pound).

There are 8 major currency pairs, all of which involve the US Dollar. If the US Dollar is not part of the currency pair, it is not considered a major currency pair.

EUR/USD

The Euro to US Dollar currency pair is the most widely traded Forex pair in the market, representing two of the world’s largest economies: Europe and the U.S. In this pair, traders are essentially trading the euro against the U.S. dollar. If the USD strengthens, the EUR/USD pair weakens as the USD becomes more valuable than the EUR.

This pair falls under the Majors category, and its high liquidity typically makes it less volatile than other pairs. However, even liquid pairs can experience increased volatility under certain conditions. Key economic factors such as the Fed’s interest rate decisions, inflation, monetary policy shifts, and geopolitical events can significantly impact the EUR/USD. Start trading CFDs on EUR/USD now.

USD/JPY

The US Dollar to Japanese Yen currency pair is the second most traded Forex pair after EUR/USD. This pair shows how many Japanese Yen are required to buy one US dollar. USD/JPY tends to have very high liquidity, but the JPY is often seen as a ‘safe haven’ currency during global economic uncertainty. Economic and political events in Asia, particularly China and Korea, can also impact the JPY, which is sometimes referred to as the “Gateway to the East.” Start trading CFDs on USD/JPY now.

GBP/USD

The British Pound to US Dollar currency pair is also known as ‘Cable,’ a term originating from the first cable-based transatlantic telephone lines used to trade this pair. The UK and the US are both major Western economies with strong trade ties. However, the ongoing uncertainty surrounding Brexit has increased volatility in the GBP/USD. The pound is also heavily traded against the euro, which is reflected in the EUR/GBP cross pair. Start trading CFDs on GBP/USD now.

USD/CAD

The US Dollar to Canadian Dollar currency pair, often called the “Loonie” due to the loon bird on the coin, is highly influenced by commodity prices, particularly oil, as Canada is a major exporter of oil, minerals, and grains. The liquidity in USD/CAD is strong due to international trade in these commodities, though the pair can also experience significant volatility when commodity prices fluctuate. Start trading CFDs on USD/CAD now.

AUD/USD

The Australian Dollar to US Dollar currency pair is another popular major pair. Australia, like Canada, is a major exporter of commodities, including natural gas, coal, iron ore, and agricultural products. These trade flows provide strong liquidity for AUD/USD, but the pair can also experience high volatility depending on the state of global commodity markets. Start trading CFDs on AUD/USD now.

Choosing Your Currency Pair

When selecting a currency pair to trade, it’s often recommended to stick with your country’s currency. This allows you to stay informed about the local political and economic events that can impact your trading. Additionally, local news outlets and social media often provide daily updates on trends that affect these currencies, making it easier to keep track of potential movements.

If you want to test your strategy with popular Forex pairs, consider using our free demo account. It includes live market quotes and a variety of Forex trading indicators. You’ll be able to see how currency pairs perform in real time and get familiar with trading tools and terminology. Remember, Forex trading involves risk, and caution is advised.

Safe Haven Currencies: What They Mean and What They Are

In addition to the popular Forex pairs, there are also “safe haven” currencies in the Forex market. Safe haven currencies tend to maintain their value or even appreciate during times of economic instability, offering a refuge for traders in turbulent markets.

While considered safe havens, these currencies can still depreciate during certain events, so they should not be relied upon exclusively.

What Does Safe Haven Mean?

In the Forex market, a safe haven refers to a currency that traders turn to in times of financial instability. These currencies often hold their value or increase in value as other assets decline. Similar safe havens exist in other asset classes, such as gold, which is also considered a store of value during times of crisis.

Main Safe Haven Currencies

  • US Dollar: The USD has long been considered a safe haven currency, as it is the reserve currency of the world’s largest economy. The USD is highly liquid and often rises during times of global uncertainty, though its status has fluctuated in recent years, particularly during events like the 2020 Coronavirus pandemic.
  • Japanese Yen: The JPY has shown its ability to rise during times of market volatility. For instance, during the financial crisis of 2008, the yen appreciated by nearly 20%, even as other currencies were losing value. However, the yen is not immune to depreciation, as seen during the Omicron variant outbreak in 2021.
  • Swiss Franc: The Swiss franc (CHF) is also known as a safe haven currency. Its value tends to rise in response to market instability due to the stability of Switzerland’s financial system and government. For example, during the Covid-19 pandemic, the Swiss franc appreciated by 10% against the US dollar.