Currency pair


    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

    Shortcut Currencies FX jargon
    EUR/USD euro/US dollar euro
    USD/JPY US dollar/Japanese yen yen
    GBP/USD pound/US dollar Cable
    USD/CHF US dollar/Swiss franc Swissy
    USD/CAD US dollar/Canadian dollar Loonie
    AUD/USD Australian dollar/US dollar Aussie
    NZD/USD New Zealand dollar/US dollar Kiwi

    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

    Shortcut Currencies
    EUR/CHF euro/Swiss franc
    EUR/GBP euro/pound sterling
    EUR/CAD euro/Canadian dollar
    EUR/AUD euro/Australian dollar
    EUR/NZD euro/New Zealand dollar

    Yen crosses

    Shortcut Currencies
    EUR/JPY euro/Japanese yen
    GBP/JPY Pound sterling/Japanese yen
    CHF/JPY Swiss franc/Japanese yen
    CAD/JPY Canadian dollar/Japanese yen
    AUD/JPY Australian dollar/Japanese yen
    NZD/JPY New Zealand dollar/Japanese yen

    Pound crosses

    Shortcut Currencies
    GBP/CHF pound sterling/Swiss franc
    GBP/AUD pound sterling/Australian dollar
    GBP/CAD pound sterling/Canadian dollar
    GBP/NZD pound sterling/New Zealand dollar

    Other crosses

    Shortcut Currencies
    AUD/CHF Australian dollar/Swiss franc
    AUD/CAD Australian dollar/Canadian dollar
    AUD/NZD Australian dollar/New Zealand dollar
    CAD/CHF Canadian dollar/Swiss franc
    NZD/CHF New Zealand dollar/Swiss franc
    NZD/CAD New 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

    Shortcut Currencies
    USD/HKD US dollar/Hong Kong dollar
    USD/SGD US dollar/Singapore dollar
    USD/ZAR US dollar/South African rand
    USD/THB US dollar/Thailand baht
    USD/MXN US dollar/Mexican peso
    USD/DKK US dollar/Danish krone
    USD/SEK US dollar/Swedish krone
    USD/NOK US dollar/Norwegian krone

    Further reading

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