What are the Major Currency Pairs in Forex Trading?

The 4 major pairs or the big four in Forex are:

• EURUSD
• USDJPY
• GBPUSD
• USDCHF

Currencies are traded in pairs of two e.g. EURUSD

Major currency pairs have a combination of the USD and one other major(EUR, JPY, GBP, CHF).

These major currency pairs are the most traded because they have a high turnover and are the most profitable.

These major currency pairs are the best currency pairs for day trading, if you want to make the most profit it is best to trade only these four major currency pairs only.

Daily Turnover of Currencies by Volumes

The USD is the most traded, followed by EUR, GBP, JPY and CHF, the daily turnover volume share taken by each of these 5 in terms of percent is shown below:

USD - 85%

EUR - 40%

JPY - 20%

GBP - 13 %

CHF - 9 %

US Dollar or USD - the United States dollar is the main currency of the world. It is used as the standard measure of all other currencies that are transacted in the FX market. All others are generally quoted in terms of US dollar.

The US dollar is a safe haven currency, because it is held as a reserve by many central banks. In times of economic recession the dollar will strengthen due to the fact that investors buy the dollar because of its safe haven status. On the other hand when the economies are doing well people will go for those that are higher yielding such as the EURO, Pound, Swiss Franc and Australian Dollar.

In the forex market the dollar is traded against other major currencies, these are Euro, Japanese Yen, British Pound and Swiss Franc.

Euro or EUR - Euro has a strong international presence because it represents 17 Euro-zone member countries of the European Monetary Union. Because the Euro represents 17 economies, this makes the Euro the second most transacted after the US dollar.

Japanese Yen or JPY - Japanese Yen is the third most transacted in the world because of its liquidity. Japanese economy is the second biggest economy after the US economy.

British Pound or GBP - Britain economy is the third largest economy after the US and the Japanese Economy. This makes the British pound liquid and it is the fourth most transacted in the forex market.

Swiss Franc or CHF - Swiss Franc is the only major of a major European country that does not belong to the European Monetary Union or G-7 countries. Although the Swiss economy is relatively small, the Swiss Franc is one of the five major currencies in the Forex Market. This is because of the strength of the Swiss banking system and the Swiss economy which makes the Swiss Franc stable with a high demand that exceeds supply.

The Canadian Dollar or CAD and the Australian Dollar or AUD are also part of the currencies traded on the market but these do not count as being part of the majors because of their illiquidity.