Learn More About Currency Pairs At Forex Forum.
When people trade Forex, they use currencies as trading assets. A currency pair is a combination of two different currencies: a base currency means the first one in a pair; as for the quote currency meaning, it's the second currency in the pair. In general, the currencies are identified by the three-letter codes such as USD (US Dollar), GBP (Great Britain Pound), etc, and their pairs use a slash between the currencies (GBP/USD).
What are Currency Pairs?In basic financial markets, the traders seek to profit by comparing the prices of different commodities. They then invest in the commodity that is more valuable and which will bring them the most profit.
This is no different than in the Forex Exchange Market, where, instead of speculating the value of a commodity, the traders speculate the currency prices of one currency against another. When two currencies are quoted against each other and their values compared, they become a Currency Pair.
Here are the popular currency pairs, that use in forex market:
What follows in the table below are the countries, currency names, three letter codes and traditional symbols for the major and minor currencies:
- European Union Euro EUR €
- United States Dollar USD $
- United Kingdom Pound Sterling GBP £
- Japanese Yen JPY ¥
- Switzerland Swiss Franc CHF Sfr.
- Australia Australian Dollar AUD A$
- New Zealand New Zealand Dollar NZD NZ$
- Canada Canadian Dollar CAD C$
1. EUR/USDThe Euro to US Dollar currency pair is the single most widely-traded forex pair in the market and comprises the currencies of two of the world's biggest economies. Due to its high liquidity, it tends to be somewhat less volatile than other currency pairs, however, traders should be aware that even the most liquid instruments can become highly volatile under certain conditions.
2. GBP/USDThe British Pound to US Dollar currency pair is also known as 'Cable' due to the fact it was the first currency pair to be traded via telephone lines, or cables that crossed the Atlantic Ocean. The United Kingdom and the United States are two of the largest western economies and share very strong trade relations. However, the ongoing uncertainty that stems from the UK's plans to exit the EU ("Brexit") has led to greater volatility in the GBP/USD. The pound is also very heavily traded against the euro, reflected in the EUR/GBP cross pair.
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