Currency pairs explained

Different types of currency pairs

As you’ve now learned, the US Dollar is by far the most frequently traded currency in the world. As a result, most currencies are quoted against US Dollar. However, there are several different types of currency pairs used when referring to forex trading, each of which are split into groups depending on the amount of trading activity and liquidity. These are known as majors, minors (or crosses) and last but not least exotic pairs. 

Major currency pairs

The most traded currency pairs in the world are called the majors. They are generally the most liquid and attractive to all types of forex traders. The EURUSD is by far the most traded pair, representing close to 30% of all daily forex trades on the entire forex market.

PairCurrenciesCountries
EURUSDEuro/US DollarEurozone/United States
GBPUSDBritish pound/US DollarUnited Kingdom/United States
USDJPYUS Dollar/Japanese YenUnited States/Japan
USDCHFUS Dollar/Swiss FrancUnited States/Switzerland
USDCADUS Dollar/Canadian DollarUnited States/Canada
AUDUSDAustralian Dollar/US DollarAustralia/United States
NZDUSDNew Zealand Dollar/US DollarNew Zealand/United States

Currencies not classed as major currencies, but are normally traded against a major currency are called minor currencies and crosses.

Minor currency pairs and crosses

Currency pairs that do not contain the US Dollar are known as crosses. A currency pair involving a major non-US Dollar currency would also be known as a minor currency pair.

The most common crosses are pairs derived from the three major non-US Dollar currencies - Euro, Great British Pound and Japanese Yen. For example, pairs that involve the euro are called ‘euro crosses’. Below is a list of Euro, Pound, Yen and other crosses.

Euro Crosses
EURGBPEuro/British Pound
EURCHFEuro/Swiss Franc
EURAUDEuro/Australian Dollar
EURCADEuro/Canadian Dollar
Pound Crosses
GBPAUDBritish Pound/Australian Dollar
GBPCADBritish Pound/Canadian Dollar
GBPCHFBritish Pound/Swiss Franc
GBPNZDBritish Pound/New Zealand Dollar
Yen Crosses
GBPJPYBritish Pound/Japanese Yen
EURJPYEuro/Japanese Yen
CHFJPYSwiss Franc/Japanese Yen
CADJPYCanadian Dollar/Japanese Yen
AUDJPYAustralian Dollar/Japanese Yen
NZDJPYNew Zealand Dollar/Japanese Yen
Other Crosses
AUDCADAustralian Dollar/Canadian Dollar
AUDNZDAustralian Dollar/New Zealand Dollar
AUDCHFAustralian Dollar/Swiss Franc
CADCHFCanadian dollar/Swiss Franc
NZDCADNew Zealand Dollar/Canadian Dollar
NZDCHFNew Zealand Dollar/Swiss Franc

Exotic currency pairs

Trading exotic pairs offers you exposure to a wide range of developing and emerging market economies across Asia, the Middle East and Africa. In general, exotic pairs are not traded as often as majors or crosses, which in turn means they are not very liquid markets and lack consistent market activity.

There are often pros and cons associated with trading exotic currency pairs. Because they are not so widely traded, they can often be subject to higher trading fees, however when the market moves they can be subject to some wild price fluctuations (suitable for the more experienced trader).

Below is a list of some of the main currency pairs referred to when talking about exotic pairs.

PairCurrenciesCountries
USDSEKUS dollar/Swedish KronaUnited States/Sweden
USDNOKUS dollar/Norwegian KroneUnited States/Norway
USDTRYUS dollar/Turkish LiraUnited States/Turkey
USDMXNUS dollar/Mexican PesoUnited States/Mexico
USDZARUS dollar/South African RandUnited States/South Africa
USDPLNUS dollar/Polish ZlotyUnited States/Poland
USDSGDUS dollar/Singapore DollarUnited States/Singapore

Nicknames

In forex, many currency pairs (especially the majors) have particular nicknames which are commonly used in the market. Many even have an interesting story as to why they were even nicknamed that in the first place. For example, the FX pair GBPUSD is also known as ‘cable’. This dates back to the 19th century when a communications cable ran across the Atlantic Ocean floor to get the exchange rate between the US Dollar and the British Pound.

In some cases, the currency by itself is known by a different name. For example, the US dollar is often referred to as the ‘greenback’, while you may hear the British pound referred to as ‘sterling’.

Below is a list of the most popular currency pair nicknames.

Currency pairNickname
GBPUSDCable
EURUSDFiber
EURGBPChunnel
USDCADLoonie
AUDUSDAussie
NZDUSDKiwi
GBPJPYGuppy
EURJPYYuppy
USDCHFSwissy

Currency codes

Currencies are often abbreviated to a three-letter currency code. The first two letters symbolise the name of the country, while the third is the country’s currency.

Let’s look at a few examples.

GBP - ‘GB’ stands for Great Britain, while the ‘P’ stands for Pound

USD - ‘US’ stands for United States, the ‘D’ stands for Dollar

JPY - ‘JP’ stands for Japan, the ‘Y’ stands for Yen

In trading you will hear a lot about 'pips' and 'spreads'. Learn about pips in forex, and how different factors can influence spreads.

Start trading in 3 easy steps

Register

Apply for a trading account

Deposit

Fund your live trading account

Trade

Start your trading journey

Create Account