- Foreign exchange rates are quoted in pairs
- The Majors, refer to actively traded Forex currencies
- Major Pairs reference major currencies coupled with the USD
By now you probably know that foreign exchange rates are quoted in pairs. While this is important, it is also imperative to know exactly which currencies are being referenced in these pairs. Whether you are preparing to place your first trade or are a seasoned pro analyzing extensive research having a firm grasp on which currency is which will ultimately influence your decisions.
To help today we will review the Forex market Major Currencies and Pairs.
When trading Forex, it is inevitable that traders will run across currencies known as “The Majors”. This term is in reference to the most frequently traded currencies in the world, with the list normally including the Euro (EUR), US Dollar (USD), Japanese Yen (JPY), Great British Pound (GBP), Australian Dollar (AUD), and Swiss Franc (CHF).See the graph below, and you will find a list of the Major currencies along with their associated country and ISO symbol.
The Symbol is how you will know exactly which currency you are trading when referencing a Forex Bid/Ask quote. However, it is also important to review each currencies nickname. These names will often come up in research and will be handy when communicating with other Forex traders.
Major Currency Pairs
Next we will take a look at currencies pairs that are considered “Major Pairs”. The Major Pairs are a reference to any of the major currencies listed above when paired with the USD. For example, the EURO is considered a major currency, but when paired with the USD (EUR/USD) the quote becomes a reference to a major pair.
---Written by Walker England, Trading Instructor
To contact Walker, email WEngland@DailyFX.com
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