Currency pair

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    Currency pairA currency pair is the price of one currency in relation to another. Currency pairs are traded on the foreign exchange market.

    Currencies are always traded in pairs, so if you buy one currency you will automatically be selling another and vice versa.

    For example, if you decide to buy EUR/USD, you purchase euros and pay for them with US dollars. If you close your position, you sell your euros and automatically purchase back the US dollars.

    The first currency in a currency pair is called the base currency. The second currency is called the quote currency.

    Trading currency pairs

    To start learning how to trade currencies, we recommend our forex beginner strategy:

    What are the major currency pairs?

    The major currency pairs all contain the US dollar and are the most traded pairs on the forex market. For this reason they are very liquid.

    Shortcut currencies FX jargon

    ShortcutCurrenciesFX jargon
    EUR/USDeuro/US dollareuro
    USD/JPYUS dollar/Japanese yenyen
    GBP/USDpound/US dollarCable
    USD/CHFUS dollar/Swiss francSwissy
    USD/CADUS dollar/Canadian dollarLoonie
    AUD/USDAustralian dollar/US dollarAussie
    NZD/USDNew Zealand dollar/US dollarKiwi

    Major cross currency pairs

    When a pair contains two of the major currencies, but not the USD, it is considered to be a cross currency pair. The most commonly traded cross currency pairs are a combination of EUR, JPY and GBP.

    Euro crosses

    Shortcut currencies

    ShortcutCurrencies
    EUR/CHFeuro/Swiss franc
    EUR/GBPeuro/pound sterling
    EUR/CADeuro/Canadian dollar
    EUR/AUDeuro/Australian dollar
    EUR/NZDeuro/New Zealand dollar

    Yen crosses

    ShortcutCurrencies
    EUR/JPYeuro/Japanese yen
    GBP/JPYPound sterling/Japanese yen
    CHF/JPYSwiss franc/Japanese yen
    CAD/JPYCanadian dollar/Japanese yen
    AUD/JPYAustralian dollar/Japanese yen
    NZD/JPYNew Zealand dollar/Japanese yen

    Pound crosses

    ShortcutCurrencies
    GBP/CHFpound sterling/Swiss franc
    GBP/AUDpound sterling/Australian dollar
    GBP/CADpound sterling/Canadian dollar
    GBP/NZDpound sterling/New Zealand dollar

    Other crosses

    ShortcutCurrencies
    AUD/CHFAustralian dollar/Swiss franc
    AUD/CADAustralian dollar/Canadian dollar
    AUD/NZDAustralian dollar/New Zealand dollar
    CAD/CHFCanadian dollar/Swiss franc
    NZD/CHFNew Zealand dollar/Swiss franc
    NZD/CADNew Zealand dollar/Canadian dollar

    The exotic pairs

    Exotic pairs are the combination between one major currency and another currency that is not a major. The major currency is usually paired with a currency from an emerging economy, such as Brazil, Mexico, India or South Africa, or a smaller, less economically strong country, such as the Czech Republic or Norway.

    They are not as frequently traded as major or cross pairs, so the broker could charge a wider spread.

    Examples of exotic pairs that are usually offered by brokers:

    Shortcut currencies

    ShortcutCurrencies
    USD/HKDUS dollar/Hong Kong dollar
    USD/SGDUS dollar/Singapore dollar
    USD/ZARUS dollar/South African rand
    USD/THBUS dollar/Thailand baht
    USD/MXNUS dollar/Mexican peso
    USD/DKKUS dollar/Danish krone
    USD/SEKUS dollar/Swedish krone
    USD/NOKUS dollar/Norwegian krone

    Further reading

    To learn more about the economic impact on currency pairs, visit our lesson on currency correlation.