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Forex Currency Pairs – Major Pairs, Cross Pairs, Cross Pairs (Cont), Commodity Pairs, Emerging Market Pairs

EUR/USD

The EUR/USD is the pairs of the euro and the United States dollar. The EUR/USD is the most traded currency pair in the world, accounting for nearly 30% of the total daily volume in FX. This sheer volume makes it incredibly liquid. EUR/USD is highly sensitive to fundamental news announcements released by the U.S., and due to its popularity, traders can access a wealth of analytical information.

NZD/USD

The NZD/USD is the pairs of the New Zealand dollar and the United States dollar. New Zealand’s economy is heavily dependent on exporting raw materials. As a result, the NZD’s strength correlates with the price of gold.

GBP/USD

The GBP/USD is the pairs of the British pound and the United States dollar. Also known as “cable,” GBP/USD is the third most traded pair. Price movements in cable are known to correlate with EUR/USD. Since the pair isn’t as liquid as the EUR/USD, GBP/USD experiences more aggressive price movements when U.S. data is released. The UK boasts the second-largest economy in the eurozone, after Germany.

USD/CHF

The USD/CHF is the pairs of the United States dollar and the Swiss franc. The Swiss franc became a safe-haven currency in times of crisis due to Switzerland’s history of remaining neutral in times of war. The franc remains a safe haven currency, and spikes in price can be seen during geopolitical crises.

USD/JPY

The USD/JPY is the pairs of the United States dollar and the Japanese yen. The USD/JPY is one of the major pair types and is the second most traded pair in the world. Japan has the third-largest GDP after the United States and China. Since Japan’s economy is driven by its exports, the country prefers a weak yen to increase international sales.

AUD/USD

The AUD/USD is the pairs of the Australian dollar and the United States dollar. The AUD/USD is considered one of the three most popular commodity pairs. Price action in this commodity pair is influenced by the price of Australia’s natural resources. In particular, the price of gold is known to correlate closely with AUD/USD.

USD/CAD

The USD/CAD is the pairs of the United States dollar and the Canadian dollar. Canada’s economy is heavily dependent on exporting raw materials. As a result, the CAD’s strength correlates with the price of oil.

AUD/CAD

The AUD/CAD is the pairs of the Australian dollar and the Canadian dollar. The AUD and CAD are considered two of the top three commodity currencies, with AUD correlating with gold and CAD correlating with oil. These correlations create an interesting dynamic when trading AUD/CAD, as traders can use gold and oil as a safeguard or as an indicator of future price action in the pair.

AUD/JPY

The AUD/JPY is the pairs of the Australian dollar and the Japanese yen. The high-interest rate in AUD in comparison to that of JPY makes AUD/JPY a popular pair to “carry trade.” A carry trade involves buying a currency with a high-interest rate in hopes of earning profit off the daily swap payments (although losses are certainly possible). To perform a carry trade in AUD/JPY, a trader would simply open a buy position

AUD/NZD

The AUD/NZD is the pairs of the Australian dollar and the New Zealand dollar. The Australian and New Zealand economies depend heavily on exporting raw materials, making these currencies’ strength dependent on commodity prices.

CAD/JPY

The CAD/JPY is the pairs of the Canadian dollar and the Japanese yen. Since Japan is the third-largest net importer of oil and Canada is the sixth-largest oil-producing country, oil prices have a considerable influence on the pair.

CHF/JPY

The CHF/JPY is the pairs of the Swiss franc and the Japanese yen. The Swiss franc is a safe-haven currency that gains in value during times of social and geopolitical crises, while the yen is manipulated by the export-reliant Japanese government. Japan’s dependency on exports drives the government to weaken its currency. Look for drastic moves in this pair during times of crisis.

EUR/AUD

The EUR/AUD is the pairs of the euro and the Australian dollar. The euro is the second most traded currency after the United States dollar, and the Australian dollar is the fifth most traded currency. As a cross-currency, EUR/AUD is fairly liquid and experiences its greatest activity during the euro and U.S. Sessions and when Australian data is released during the Asian session.

EUR/CAD

The EUR/CAD is the pairs of the euro and the Canadian dollar. Canada’s economy is heavily dependent on exporting raw materials. As a result, the CAD’s strength correlates with the price of oil. This cross-currency pair experiences its greatest activity during the euro and U.S. sessions and is subject to movement based on European and Canadian news announcements.

EUR/CHF

The EUR/CHF is the pairs of the euro and the Swiss franc. As a safe-haven currency, the franc is subject to movement during times of social and geopolitical unrest. Otherwise, the pair is usually most active during the euro and U.S. sessions.

EUR/GBP

The EUR/GBP is the pairs of the euro and the British pound. Nicknamed the “chunnel,” EUR/GBP is a very popular cross instrument that experiences aggressive moves during the euro and U.S. sessions.

EUR/JPY

The EUR/JPY is the pairs of the euro and the Japanese yen. EUR/JPY is an extremely volatile pair that can move as much as 250 pips in one trading day. The euro is the second most traded currency, and the yen is the third, after the United States dollar. Nicknamed the “yuppy” or “euppy,” EUR/JPY is most active during the euro and U.S. sessions.

EUR/TRY

The EUR/TRY is the pairing of the euro and the Turkish lira. This exotic cross is affected by news releases coming out of the eurozone and economic conditions in Turkey. As an emerging market, Turkey is expected to experience rapid growth and modern industrialization. This growth may prove to have an effect on the TRY.

GBP/AUD

The GBP/AUD is the pairing of the British pound and the Australian dollar. The pair is most active during the euro and U.S. sessions and when Australian data is released. Some notable news releases affecting the pair include the Australian RBA rate decision and gross domestic product, as well as the UK trade balance and consumer price index.

GBP/CAD

The GBP/CAD is the pairing of the British pound and the Canadian dollar. This pair is most active during the euro and U.S. sessions. Some notable news releases affecting the pair include the Bank of Canada rate decision and Ivey purchasing managers index, as well as the UK trade balance and consumer price index.

GBP/CHF

The GBP/CHF is the pairing of the British pound and the Swiss franc. As a safe-haven currency, the franc is subject to movement during times of social and geopolitical unrest. Some notable news releases affecting the pair include the Swiss National Bank monetary policy assessment and consumer price index as well as the UK trade balance and retail sales.

GBP/JPY

The GBP/JPY is the pairing of the British pound and the Japanese yen. Also known as the “gopher” or “geppy,” the GBP/JPY is extremely volatile and can move up to 350 pips in a single trading day.

NZD/JPY

The NZD/JPY is the pairing of the New Zealand dollar and the Japanese yen. The difference in interest rates between NZD and JPY makes NZD/JPY a popular pair to “carry trade.” A carry trade involves buying a currency with a high-interest rate in hopes of earning profit off the daily swap payments (although losses are certainly possible).

XAG/USD

XAG/USD conveys the value of silver compared to the United States dollar. The silver instrument correlates closely to gold but, unlike gold, can be traded for a smaller spread cost. Savvy traders can attempt to profit from fluctuations in the price of metals or use these instruments as a safeguard against inflation or commodity pairs.

XAU/USD

XAU/USD conveys the value of gold compared to the United States dollar. Savvy traders can attempt to profit from fluctuations in the price of metals or use these instruments as a safeguard against inflation or commodity pairs.

USD/MXN

The USD/MXN is the pairing of the United States dollar and the Mexican peso. Mexico is an emerging power. Experts at Goldman Sachs have anticipated Mexico becoming the fifth largest economy in the world by 2050. As Mexico continues to develop, investors eagerly anticipate the future of this pair.

USD/SGD

The USD/SGD is the pairing of the United States dollar and the Singapore dollar. The difference in interest rates between USD and SGD makes USD/SGD a popular pair to “carry trade.” A carry trade involves buying a currency with a high-interest rate in hopes of earning profit off the daily swap payments (although losses are certainly possible).

USD/TRY

The USD/TRY is the pairing of the United States dollar and the Turkish lira. As an emerging market, Turkey is expected to experience rapid growth and modern industrialization. Turkey has experienced a dramatic increase in its GDP since 2001, even throughout the period of global recession. This growth may prove to have an effect on the TRY.

USD/CNH

The USD/CNH is the pairing of the United States Dollar and the Chinese offshore renminbi. China is one of the BRIC countries. Considered one of the “Big Four,” China is the largest emerging market in terms of GDP. Since 2005, the yuan has been pegged to the United States dollar. The Chinese government is expected to increase the flexibility of the exchange rates in the future, which may result in price spikes in the pair.

USD/CNY

The USD/CNY is the pairing of the United States dollar and the Chinese yuan. China is one of the BRIC countries. Considered one of the “Big Four,” China is the largest emerging market in terms of GDP. Since 2005, the yuan has been pegged to the United States dollar. The Chinese government is expected to increase the flexibility of the exchange rates in the future, which may result in price spikes in the pair.

USD/INR

The USD/INR is the pairing of the United States dollar and the Indian rupee. India is one of the four largest emerging markets, known as the BRIC countries. According to the 2010 BIS Triennial Central Bank Survey, the rupee grew 42% since 2008. As the country continues to develop, the rupee may appreciate even more.

USD/KRW

The USD/KRW is the pairing of the United States dollar and the South Korean won. The won was initially pegged to the dollar at 15 won per dollar but adopted a free-floating exchange rate in 1980. South Korea’s economy has been rapidly growing since the 1960s and continues to expand along with the other Asian Tigers.

USD/TWD

The USD/TWD is the pairing of the United States dollar and the Taiwan dollar. Known as one of the “Four Asian Tigers,” Taiwan experienced rapid industrialization and economic growth during the latter half of the twentieth century. This period of time is known as the Taiwan Miracle. Taiwan imports its energy needs due to its lack of natural resources, and therefore the TWD may be affected by oil prices.

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