What are the Most Traded Currency Pairs in Forex Market?

Forex market officially contains many pairs but only some of them are traded actively. These popular pairs make up most of the volume in the forex market, thus it is essential to know about these pairs.

The eight most traded currencies in the forex market are the U.S. dollar (USD), the Canadian dollar (CAD), the euro (EUR), the British pound (GBP), the Swiss franc (CHF), the New Zealand dollar (NZD), the Australian dollar (AUD) and the Japanese yen (JPY). The reason, these currencies are mostly traded is that these countries are economically and politically stable. For example, due to the size and strength of the United States economy, the American dollar is the world’s most actively traded currency.

In forex markets, the dollar is the most traded currency, 84.9% of forex transactions are in USD. The euro comes second at 39.1%, while that of the yen is third at 19.0%. The following chart shows currency distribution of global foreign exchange market turnover.


Currency trade by volume (source: Wikipedia)

Figure 1. Currency trade by volume (source: Wikipedia)

Most Traded Currency Pairs:

EUR/USD USD/CAD EUR/JPY EUR/CHF GBP/USD AUD/CAD
NZD/AUD GBP/CHF AUD/USD GBP/JPY USD/JPY CHF/JPY
EUR/CAD AUD/JPY EUR/AUD EUR/GBP NZD/USD USD/CHF

Above are the pairs that are derived from the eight most traded currencies in the forex market. Well actually we can derive more (28 total to be precise) but not every broker offers all pairs.

Exotic Pairs

Exotic pairs are made up of one major currency paired with the currency of an emerging economy, such as Brazil, Mexico, or India. They are also called as cross pairs as they are nothing more than the derivatives from the major currency pairs.

These cross pairs are not as heavily traded as the other major pairs, so the transaction costs associated with trading these pairs are usually bigger and not every broker allows trading all exotic pair, thus it is essential to see if your broker allows you to trade the exotic pair you want and transaction cost that it has. Trading exotic pairs can be dangerous due to high volatility they offer as the volume in these pairs is often low.

The chart below contains a few examples of exotic currency pairs.

Country

Pair Symbol

USD/SGD

United States/ Singapore

USD/ZAR

United States/ South Africa

USD/HKD

United States/ Hong Kong

USD/MXN

United States/ Mexico

USD/INR

United States/ India