Currency Pairs

A foreign exchange rate reflects the comparative value between two distinct currencies in the forex market.

What are currency pairs?​

Currency pairs are two currencies traded against each other in the foreign exchange (forex) market. They consist of a base currency and a quote currency. The value of a currency pair shows how much of the quote currency is needed to buy one unit of the base currency. Major pairs involve major economies like EUR/USD, while minor pairs don’t include the US dollar, and exotic pairs include one major currency and one from a developing economy. Traders speculate on currency pair values to profit from exchange rate changes.

Most Traded Currency pairs?

The most traded currency pairs in the forex market are known as the major pairs. These pairs involve currencies from the world’s largest economies and typically have the highest trading volumes. The most traded currency pairs include:

These major pairs are highly liquid and widely traded, making them popular choices for traders seeking opportunities in the forex market.


EUR/USD is by far the most traded currency pair, making up 20% of all forex transactions. This is because it involves the two largest economies in the world – the hugely dominant US dollar, and all the countries within the Eurozone.

In terms of forex trading, the extremely high daily volume of EUR/USD transactions means that the currency pair has a lot of liquidity, meaning that it can be bought and sold without too much fluctuation in the price. This means that the spreads are generally quite tight, and orders can be executed faster.


The second-most traded currencies, the US dollar and the Japanese Yen, have significant investment ties and import and export a huge amount of goods between each other. Japan is known for its strong financial sector, and against the dollar, this makes for a strong pairing.


Despite the two currencies fluctuating against each other throughout the turbulent 20th century, the pound and the dollar have a strong relationship. While GBP has always been ahead of the USD in value, the dollar has come close to overtaking GBP a few times, reaching GBP/USD 1.05 in 1985 and GBP/USD 1.08 in 2022.

Minor currency pairs & exotic currencies

Minor currency pairs and exotic currencies are also traded in the forex market, but they typically have lower trading volumes compared to major currency pairs.

Minor Currency Pairs

These pairs do not include the US dollar but involve currencies from major economies. Some examples include:

Exotic Currency Pairs

Exotic currency pairs involve one major currency and one currency from a smaller or emerging economy. They tend to have less liquidity and higher spreads compared to major pairs. Examples include:

These pairs can offer opportunities for traders with specific strategies or interests in particular regions or currencies, but they also carry higher risks due to their lower liquidity and potentially wider spreads.

Forex Trading Advantages

Forex trading, or foreign exchange trading, offers several advantages to investors and traders. Some of the key advantages include:
Overall, forex trading offers advantages such as high liquidity, accessibility, and diverse trading opportunities, making it an attractive market for traders looking to participate in the dynamic world of foreign exchange. However, it’s important for traders to understand the risks involved and to develop a sound trading strategy to navigate the forex market successfully.

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