Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Most Traded Currency Pairs: Understand the Most Traded Forex Pairs

In this article, you will discover the top 8 most traded currency pairs, their unique characteristics, the factors behind their popularity, key advantages and challenges, and actionable tips to refine your forex trading strategies.

What are Currency Pairs?

In the forex market, currencies are traded in pairs, representing the exchange rate between two currencies. Each pair consists of a base currency (the first currency) and a quote currency (the second currency). For example, in the EUR/USD pair, the Euro is the base currency, and the US Dollar is the quote currency.

Learn what forex trading is and how it works. 

Currency pairs are categorized into three types:

Major Pairs: Major pairs, like EUR/USD and USD/JPY, involve the US Dollar paired with another major currency. They dominate trading volume, offering high liquidity, tight spreads, and moderate volatility. These pairs respond predictably to global economic indicators, making them popular among traders.

Discover what are the major currency pairs. 

Minor Pairs: Minor pairs exclude the US Dollar but involve major currencies, such as EUR/GBP or GBP/JPY. They are slightly less liquid and more volatile, influenced by regional factors, offering opportunities for traders seeking diversification.

Exotic Pairs: Exotic pairs, like USD/TRY, include a major currency paired with one from an emerging market. They are highly volatile and less liquid, with wider spreads. These pairs appeal to experienced traders due to their high-risk, high-reward nature.

List of the Most Traded Currency Pairs

The forex market is dominated by a handful of pairs known for their high liquidity and trading volume. These are the most traded currency pairs:

1. EUR/USD

The EUR/USD pair is the most actively traded in the forex market, accounting for approximately 20–25% of the total trading volume. Its prominence is rooted in the economic strength of both the Eurozone and the United States, which are two of the largest economic regions in the world. This pair is characterized by its high liquidity, which ensures minimal trading costs and efficient price discovery. For traders, the EUR/USD offers predictable price movements, making it a preferred choice for technical analysis and fundamental analysis. The pair is particularly sensitive to macroeconomic events such as monetary policy decisions by the European Central Bank (ECB) and the Federal Reserve. For example, changes in interest rates or employment figures can cause significant fluctuations, providing profit opportunities.

Find out the best time to trade EUR/USD. 

2. USD/JPY

As the second most traded currency pair, USD/JPY represents the dynamic interplay between the US Dollar, the world’s reserve currency, and the Japanese Yen, a key player in global exports. This pair is heavily influenced by monetary policies from the Bank of Japan (BoJ) and the Federal Reserve. The USD/JPY is known for its stability and low spreads, which makes it a favorite among scalpers and day traders. During periods of market uncertainty, the Yen often strengthens, reflecting its status as a safe-haven currency. For example, during global economic turmoil, traders flock to this pair to hedge their portfolios. Its average daily trading volume accounts for about 13–15% of the forex market, cementing its position as one of the most liquid pairs.

3. GBP/USD

The GBP/USD commonly referred to as “Cable” due to the historical transatlantic cable that linked the UK and the US, GBP/USD is one of the most volatile major pairs. This pair attracts traders due to its potential for significant price movements, which can translate into high returns for skilled traders. Its value is heavily influenced by economic data and political developments in the UK, such as Brexit negotiations or Bank of England interest rate changes. Representing approximately 9% of the daily forex trading volume, GBP/USD is often favored by traders who thrive on volatility. For instance, a positive surprise in UK GDP data can trigger sharp upward moves, while geopolitical uncertainties can lead to dramatic sell-offs.

4. AUD/USD

The AUD/USD is a commodity-linked pair, often reflecting the performance of Australia’s export-driven economy. It is closely tied to the prices of iron ore, coal, and gold, which are Australia’s primary exports. This pair is particularly active during the Asian trading session, providing opportunities for traders in that time zone. AUD/USD is sensitive to China’s economic performance due to the strong trade relationship between the two nations. For instance, a surge in demand for iron ore can strengthen the Australian Dollar against the US Dollar. With about 6% of global trading volume, AUD/USD appeals to traders looking to capitalize on commodity price trends and market dynamics.

5. USD/CAD

Known as the “Loonie,” USD/CAD is influenced by the Canadian economy’s reliance on oil exports. The value of this pair is highly correlated with crude oil prices, as Canada is one of the largest oil exporters in the world. When oil prices rise, the Canadian Dollar tends to appreciate against the US Dollar. For instance, during an oil price rally, USD/CAD may see a significant downward move as the Canadian Dollar strengthens. This pair accounts for approximately 5% of forex trading volume and is popular among traders seeking exposure to the energy market.

6. USD/CHF

USD/CHF is a “safe-haven” pair, often traded during times of economic or geopolitical uncertainty. The Swiss Franc is renowned for its stability, and traders turn to it as a store of value during turbulent times. This pair is less volatile than other major pairs but still provides opportunities for strategic trades, especially during central bank policy announcements. The Swiss National Bank (SNB) plays a significant role in influencing this pair through interventions and monetary policy. For example, during the Eurozone debt crisis, USD/CHF saw increased activity as traders sought refuge in the Franc. This pair accounts for around 4% of daily forex volume.

7. NZD/USD

Similar to the AUD/USD, NZD/USD is a commodity-driven pair, reflecting New Zealand’s strong agricultural export sector. The pair is influenced by global dairy prices, as New Zealand is a leading exporter of dairy products. Traders often refer to NZD/USD as a “risk-sensitive” pair because it reacts to shifts in global economic sentiment. For example, during periods of global economic growth, the New Zealand Dollar typically strengthens. Although it represents only about 2% of forex trading volume, its higher volatility appeals to experienced traders who are adept at navigating price swings.

8. EUR/GBP

EUR/GBP is a popular minor pair that reflects the economic and political relationship between the Eurozone and the UK. This pair is moderately volatile, making it suitable for traders who prefer swing trading strategies. EUR/GBP is heavily influenced by developments in Brexit negotiations, trade policies, and economic indicators from both regionsd. For instance, a positive surprise in Eurozone inflation data could strengthen the Euro against the Pound. Although it accounts for only about 2% of global forex trading volume, it is a valuable pair for those focusing on European markets and seeking to hedge risks related to these economies.

Learn how to trade forex for beginners.

Factors Affecting the Popularity of These Currency Pairs

Several factors contribute to the popularity of forex currency pairs:

Economic Stability: Forex pairs like EUR/USD and USD/JPY represent economies with robust financial systems and consistent policies. This stability minimizes extreme volatility, making these pairs attractive for traders seeking reliability and predictability.

Liquidity: Major currency pairs dominate trading volumes, ensuring high liquidity. For instance, EUR/USD alone accounts for a significant portion of global transactions, offering tight spreads and smooth trade execution.

Market Influence: Currencies in these pairs, such as the US Dollar and the Euro, are central to global trade and finance. Their demand remains consistent due to their integral role in international transactions and reserve holdings.

News Sensitivity: Major pairs respond predictably to economic data and news events. Announcements like interest rate changes or employment reports often lead to actionable price movements, enabling traders to plan strategies around these events effectively.

Advantages of Trading the Most Traded Currency Pairs

Trading the most traded forex pairs offers several benefits:

High Liquidity: The most traded currency pairs, such as EUR/USD and USD/JPY, offer unparalleled liquidity due to their massive trading volumes. High liquidity ensures that trades can be executed instantly, even in large quantities, without significant price slippage. This feature is particularly valuable for day traders and scalpers who rely on precise trade execution.

Tight Spreads: Tight spreads are a hallmark of these pairs, reducing the cost of trading. For instance, spreads on EUR/USD are typically lower compared to less popular pairs, allowing traders to maximize profitability by minimizing transaction costs.

Predictable Movements: Major pairs tend to move in response to well-understood economic indicators, such as interest rate announcements or GDP data. This predictability makes it easier for traders to apply technical analysis or fundamental analysis effectively, reducing the guesswork involved in decision-making.

Discover the difference between technical analysis and fundamental analysis.

Abundance of Resources: The popularity of these pairs has led to a wealth of educational resources, expert analyses, and trading tools focused on them. Whether you are a beginner or an experienced trader, you’ll find abundant materials to refine your strategies and improve profitability.

Disadvantages of Trading the Most Traded Currency Pairs

Despite their benefits, these pairs come with challenges:

High Competition: The widespread popularity of these pairs attracts a diverse pool of traders, including large institutional players with significant resources. Competing against these entities can be challenging, especially for retail traders.

News-Driven Volatility: While major pairs are often predictable, significant news events, such as unexpected interest rate changes or geopolitical developments, can lead to sudden and sharp price movements. Traders must remain vigilant and adapt quickly to avoid losses during such periods.

Limited Diversity: Focusing solely on the most traded pairs may limit exposure to other profitable opportunities. Exotic or minor pairs can offer higher volatility and unique trading conditions that might be missed if attention is restricted to major pairs.

Learn how to build a well-diversified portfolio. 

Tips for Trading the Most Traded Currency Pairs

To excel in trading forex currency pairs, follow these tips:

1. Understand the Market Sessions

Focus on trading during the most active sessions, such as the London and New York overlap, to benefit from increased liquidity and tighter spreads.

2. Use Technical Analysis

Apply technical analysis by studying charts and indicators such as moving averages, RSI, and trendlines to identify patterns, trends, and potential entry or exit points for your trades.

3. Follow Economic Calendars

Utilise economic calendars to track major events like interest rate announcements, GDP releases, and employment reports, helping you anticipate market movements and refine your trading strategy.

4. Utilise Demo Account

Practice your trading strategies using a demo account to simulate real market conditions, build confidence, and refine your skills before transitioning to live trading.

5. Use Risk Management Tools

Protect your investments by implementing risk management strategies, such as setting stop-loss orders, maintaining proper position sizes, and diversifying your trades to minimize potential losses.

Discover whether forex trading is profitable. 

Conclusion

The most traded currency pairs are the cornerstone of the forex market, offering high liquidity, predictable price movements, and extensive opportunities for traders. With their global economic significance and responsiveness to key economic indicators, these pairs provide a strong foundation for both new and experienced traders to refine their strategies. While their benefits are substantial, traders should remain mindful of challenges such as news-driven volatility and intense competition. By understanding the market dynamics and leveraging effective strategies, trading these pairs can lead to rewarding outcomes.

Trade Currency Pairs with VT Markets

VT Markets provides an exceptional platform for trading the most popular forex pairs through industry-leading platforms MetaTrader 4 (MT4) and MetaTrader 5 (MT5). Offering competitive spreads, cutting-edge trading tools, and comprehensive educational resources to learn forex, VT Markets caters to both new and experienced traders. Whether you’re exploring the best currency pairs to trade or sharpening your forex trading strategies, VT Markets delivers a seamless and user-focused trading experience.

Start trading forex currency pairs with VT Markets today and unlock your full trading potential!

Frequently Asked Questions (FAQs)

1. What are the most traded currency pairs in the world?

The most traded currency pairs, also known as major pairs, include:

• EUR/USD
• USD/JPY
• GBP/USD
• AUD/USD
• USD/CAD
• USD/CHF
• NZD/USD
• EUR/GBP

2. Why are some currency pairs traded more than others?

Currency pairs with high trading volumes usually involve major global economies and stable currencies, which offer tighter spreads, higher liquidity, and better trading opportunities.

3. What is the difference between major, minor, and exotic currency pairs?

Major pairs always include the US dollar and are the most liquid. Minor pairs do not include the USD but involve other major currencies. Exotic pairs consist of a major currency paired with a currency from emerging or smaller economies.

4. How do the most traded currency pairs impact forex trading?

High liquidity in these pairs means lower spreads and more efficient price movements, making them popular for traders looking for tighter costs and smoother execution.

5. Can beginners trade the most traded currency pairs?

Yes, most traded currency pairs are suitable for beginners because of their liquidity, tight spreads, and extensive market information available to help in decision-making.

6. How does economic news affect the most traded currency pairs?

Economic indicators, central bank decisions, and geopolitical events can cause significant volatility in these pairs, presenting both risks and opportunities for traders.

7. What factors should traders consider when choosing currency pairs to trade?

Traders should consider liquidity, volatility, trading hours, spreads, and their familiarity with the currencies’ underlying economies.

In today’s world, investors increasingly want their money to do more than just generate returns. They’re looking to make a positive impact whilst growing their wealth. This shift in mindset has given rise to ESG investing, an approach that’s reshaping the investment landscape. In fact, ESG assets are projected to reach a staggering USD 53 trillion by 2025.

But what exactly is ESG investing, and why should you care? The concept gained prominence with the UN’s 2004 “Who Cares Wins” report, which first linked sustainability to profitability, and has since evolved into a powerful force in modern investing.

Understanding ESG

ESG stands for Environmental, Social, and Governance – three key factors used to evaluate companies’ sustainability and ethical impact. Think of these as different lenses through which to view potential investments.

According to The 2024 ESG Survey, conducted by Deutsche Bank’s Chief Investment Office (CIO), investors are shifting their priorities across these factors, reflecting evolving concerns and market trends.

The Environmental aspect, currently prioritised by 42% of investors, focuses on how companies interact with the natural world. This includes their approach to climate change, pollution, and waste management. For instance, Apple has committed to becoming carbon neutral by 2030, demonstrating strong environmental credentials that could appeal to ESG investors.

The Social component, which 27% of investors now prioritise, examines how companies manage relationships with their employees, suppliers, customers, and communities. This encompasses workplace conditions, diversity initiatives, and human rights practices. Companies with strong social scores often demonstrate better employee retention and customer loyalty.

Governance, valued by 31% of investors, looks at how companies are run. This includes board diversity, executive pay, shareholder rights, and anti-corruption measures. Good governance often translates to better risk management and more sustainable business practices.

The survey findings underline a growing interest in social and governance aspects, even as environmental concerns remain significant, shaping how investors assess sustainability in their portfolios.

The current state of ESG

The ESG landscape is evolving rapidly, but it’s important to understand how investors are actually approaching it. Currently, only 7% of investors fully commit their portfolios to ESG principles, while 28% consider ESG factors alongside traditional financial metrics. This suggests a pragmatic approach rather than an all-or-nothing stance.

Regional differences in Europe are noteworthy. Belgian investors are particularly enthusiastic, with 62% planning to increase their ESG investments. Spanish investors show strong optimism about returns, with 40% believing ESG improves financial performance. Meanwhile, German investors tend to be more cautious, with only 20% expecting enhanced returns from ESG investments.

Why consider ESG?

The case for ESG investing goes beyond ethical considerations. While 32% of investors believe ESG factors improve returns (down from 41% in 2022), 41% see it as an effective risk management tool. This perspective is particularly relevant in today’s rapidly changing business environment.

Looking at real-world examples, companies with strong ESG practices often demonstrate resilience and innovation. Cisco, for instance, has achieved 85% renewable energy usage, potentially reducing its exposure to energy price volatility and environmental regulations. Verizon’s successful USD 1 billion green bond initiative shows how companies can fund sustainable projects while attracting investors.

The future of ESG investing appears closely tied to technological advancement and environmental challenges. In the short term, artificial intelligence and digitalisation are expected to drive performance. Longer-term, issues like climate risk and ocean conservation (the Blue Economy) are likely to become increasingly important investment considerations.

Getting started

For those interested in ESG investing, several accessible options exist. Single stocks and Exchange-Traded Funds (ETFs) are the most popular vehicles, offering different levels of diversification and control. ETFs can be particularly useful for beginners, providing exposure to a basket of ESG-screened companies.

However, challenges exist. Only 3% of investors consider themselves advanced in ESG investing, and many struggle with understanding ESG ratings and data. When starting out, consider these practical steps:

Step 1. Decide your priorities within the ESG framework. Think about which of the three ESG pillars—environmental, social, or governance—matters most to you. For example, you might prioritise companies addressing climate change or those fostering workplace diversity.

Step 2. Research ESG-focused funds or companies that align with these priorities. Look into ETFs, mutual funds, or individual companies with strong ESG credentials. Check their sustainability reports and ratings to see how well they align with your values.

Step 3. Understand that ESG ratings can vary between providers. Ratings are not standardised, and different agencies might assess the same company differently. Make sure to explore multiple sources and interpret the data in context.

Step 4. Start small and gradually increase exposure as you become more comfortable. Begin with a modest investment to understand the nuances of ESG investing without taking on excessive risk. As you gain confidence, consider diversifying further.

Step 5. Keep track of both financial and ESG performance. Monitor how your investments perform financially while also evaluating their impact on the ESG metrics you care about. This dual focus will help you make adjustments as needed.

It’s also worth noting that different regions emphasise different aspects of ESG. For example, Italian investors particularly value social factors, while other markets might prioritise environmental or governance considerations. This diversity allows investors to align their portfolios with their specific values and goals.

Conclusion

ESG investing is evolving, influenced by changing regulations, technological progress, and shifting societal priorities. While some scepticism about returns remains, the focus on risk management and long-term sustainability is strong.

For investors, ESG presents an opportunity to align investments with personal values while managing risks and seizing opportunities in a sustainable economy. The key is to maintain clear objectives, realistic expectations, and a long-term perspective.

Whether starting out or adapting your portfolio, understanding ESG factors can help make more informed investment decisions. As the investment landscape evolves, ESG considerations will become increasingly important for all investors.

Start exploring ESG opportunities today by opening a live account with VT Markets and unlocking your investment potential.

In today’s world, investors increasingly want their money to do more than just generate returns. They’re looking to make a positive impact whilst growing their wealth. This shift in mindset has given rise to ESG investing, an approach that’s reshaping the investment landscape. In fact, ESG assets are projected to reach a staggering USD 53 trillion by 2025.

But what exactly is ESG investing, and why should you care? The concept gained prominence with the UN’s 2004 “Who Cares Wins” report, which first linked sustainability to profitability, and has since evolved into a powerful force in modern investing.

Understanding ESG

ESG stands for Environmental, Social, and Governance – three key factors used to evaluate companies’ sustainability and ethical impact. Think of these as different lenses through which to view potential investments.

According to The 2024 ESG Survey, conducted by Deutsche Bank’s Chief Investment Office (CIO), investors are shifting their priorities across these factors, reflecting evolving concerns and market trends.

The Environmental aspect, currently prioritised by 42% of investors, focuses on how companies interact with the natural world. This includes their approach to climate change, pollution, and waste management. For instance, Apple has committed to becoming carbon neutral by 2030, demonstrating strong environmental credentials that could appeal to ESG investors.

The Social component, which 27% of investors now prioritise, examines how companies manage relationships with their employees, suppliers, customers, and communities. This encompasses workplace conditions, diversity initiatives, and human rights practices. Companies with strong social scores often demonstrate better employee retention and customer loyalty.

Governance, valued by 31% of investors, looks at how companies are run. This includes board diversity, executive pay, shareholder rights, and anti-corruption measures. Good governance often translates to better risk management and more sustainable business practices.

The survey findings underline a growing interest in social and governance aspects, even as environmental concerns remain significant, shaping how investors assess sustainability in their portfolios.

The current state of ESG

The ESG landscape is evolving rapidly, but it’s important to understand how investors are actually approaching it. Currently, only 7% of investors fully commit their portfolios to ESG principles, while 28% consider ESG factors alongside traditional financial metrics. This suggests a pragmatic approach rather than an all-or-nothing stance.

Regional differences in Europe are noteworthy. Belgian investors are particularly enthusiastic, with 62% planning to increase their ESG investments. Spanish investors show strong optimism about returns, with 40% believing ESG improves financial performance. Meanwhile, German investors tend to be more cautious, with only 20% expecting enhanced returns from ESG investments.

Why consider ESG?

The case for ESG investing goes beyond ethical considerations. While 32% of investors believe ESG factors improve returns (down from 41% in 2022), 41% see it as an effective risk management tool. This perspective is particularly relevant in today’s rapidly changing business environment.

Looking at real-world examples, companies with strong ESG practices often demonstrate resilience and innovation. Cisco, for instance, has achieved 85% renewable energy usage, potentially reducing its exposure to energy price volatility and environmental regulations. Verizon’s successful USD 1 billion green bond initiative shows how companies can fund sustainable projects while attracting investors.

The future of ESG investing appears closely tied to technological advancement and environmental challenges. In the short term, artificial intelligence and digitalisation are expected to drive performance. Longer-term, issues like climate risk and ocean conservation (the Blue Economy) are likely to become increasingly important investment considerations.

Getting started

For those interested in ESG investing, several accessible options exist. Single stocks and Exchange-Traded Funds (ETFs) are the most popular vehicles, offering different levels of diversification and control. ETFs can be particularly useful for beginners, providing exposure to a basket of ESG-screened companies.

However, challenges exist. Only 3% of investors consider themselves advanced in ESG investing, and many struggle with understanding ESG ratings and data. When starting out, consider these practical steps:

Step 1. Decide your priorities within the ESG framework. Think about which of the three ESG pillars—environmental, social, or governance—matters most to you. For example, you might prioritise companies addressing climate change or those fostering workplace diversity.

Step 2. Research ESG-focused funds or companies that align with these priorities. Look into ETFs, mutual funds, or individual companies with strong ESG credentials. Check their sustainability reports and ratings to see how well they align with your values.

Step 3. Understand that ESG ratings can vary between providers. Ratings are not standardised, and different agencies might assess the same company differently. Make sure to explore multiple sources and interpret the data in context.

Step 4. Start small and gradually increase exposure as you become more comfortable. Begin with a modest investment to understand the nuances of ESG investing without taking on excessive risk. As you gain confidence, consider diversifying further.

Step 5. Keep track of both financial and ESG performance. Monitor how your investments perform financially while also evaluating their impact on the ESG metrics you care about. This dual focus will help you make adjustments as needed.

It’s also worth noting that different regions emphasise different aspects of ESG. For example, Italian investors particularly value social factors, while other markets might prioritise environmental or governance considerations. This diversity allows investors to align their portfolios with their specific values and goals.

Conclusion

ESG investing is evolving, influenced by changing regulations, technological progress, and shifting societal priorities. While some scepticism about returns remains, the focus on risk management and long-term sustainability is strong.

For investors, ESG presents an opportunity to align investments with personal values while managing risks and seizing opportunities in a sustainable economy. The key is to maintain clear objectives, realistic expectations, and a long-term perspective.

Whether starting out or adapting your portfolio, understanding ESG factors can help make more informed investment decisions. As the investment landscape evolves, ESG considerations will become increasingly important for all investors.

Start exploring ESG opportunities today by opening a live account with VT Markets and unlocking your investment potential.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

What Are Major Currency Pairs and Why Do They Matter?

This article explores major currency pairs in forex trading, explaining their significance, unique characteristics, and factors influencing their prices. It categorizes the pairs and provides practical steps to help traders navigate the forex market effectively.

What Are Currency Pairs?

In the world of forex trading, currency pairs are the foundation. They represent the value of one currency relative to another. For example, the EUR/USD pair shows how many US Dollars are needed to purchase one Euro. These pairs are essential because they facilitate global trade, investment, and economic interaction. Traders buy or sell one currency while simultaneously selling or buying another, making currency pairs the central element of all foreign exchange activity.

Discover what forex trading is and how it works. 

What are Major Currency Pairs?

Major currency pairs are the most traded pairs in the forex market. They are characterized by their high liquidity, tighter spreads, and significant trading volumes. Each pair includes the US Dollar, the world’s reserve currency, paired with another major global currency. These pairs dominate forex trading, accounting for the majority of transactions in the market. Their popularity stems from their predictability and stability compared to other foreign exchange pairs.

Find out what is spread in trading and how it works. 

List of Major Currency Pairs

The list includes traditional major pairs, commodity currencies, and cross currencies, each offering unique trading opportunities. The table below shows the currency pairs, their nicknames, and the currencies in each pair.

Major forex pairs can be categorized into three groups: traditional major pairs, commodity currencies, and cross currencies:

1. What are Traditional Major Pairs?

Traditional major pairs are the most traded currency pairs in the forex market, involving the US Dollar (USD) paired with the major currencies of economically significant regions. These pairs are characterized by their high liquidity, low spreads, and frequent market activity, making them favorites among traders worldwide.

a. EUR/USD

EUR/USD, often referred to as “Fiber,” represents the Euro, the currency of the Eurozone, and the US Dollar, the world’s primary reserve currency. The Eurozone is one of the largest economic blocs globally, while the United States boasts the largest economy. This pair is the most traded currency pair in the world, making it the backbone of the forex market. Its high liquidity and stability are due to the economic strength and influence of both regions. For these reasons, EUR/USD accounts for a significant share of daily forex transactions and is a favorite among traders.

Find out the best time to trade EUR/USD. 

b. USD/JPY

USD/JPY, nicknamed “Gopher,” combines the US Dollar and the Japanese Yen. The US Dollar serves as a global benchmark currency, while the Japanese Yen represents Japan’s strong economy, which is highly focused on exports. This pair is known for its liquidity and low trading spreads, making it attractive to both novice and experienced traders. Additionally, USD/JPY is popular for carry trading due to Japan’s historically low interest rates, which provide traders with opportunities to profit from interest rate differentials.

c. GBP/USD

GBP/USD, commonly known as “Cable,” links the British Pound and the US Dollar. The Pound represents the United Kingdom, a global financial hub, while the Dollar offers stability and widespread use in international trade. This pair reflects the historical and ongoing trade relationship between the UK and the US. It is well-known for its volatility, which attracts traders who thrive on significant price movements. As a result, GBP/USD is a popular choice for traders looking to capitalize on dynamic market conditions.

d. USD/CHF

USD/CHF, often called “Swissie,” pairs the US Dollar with the Swiss Franc. The Swiss Franc is renowned for being a safe-haven currency, representing Switzerland’s political neutrality and economic stability. The US Dollar, on the other hand, is a dominant force in global trade and finance. This pair is favored by traders during periods of geopolitical or economic uncertainty, as it provides a hedge against market volatility. Its relatively stable movements make it an excellent choice for conservative traders.

2. What are Commodity Currencies?

Commodity currencies refer to currency pairs that involve countries whose economies are heavily reliant on exports of natural resources such as oil, gold, or agricultural products. These pairs often move in tandem with commodity price trends, offering opportunities for traders interested in the commodities market.

Discover the most traded commodities in the world.

a. AUD/USD

AUD/USD, nicknamed “Aussie,” pairs the Australian Dollar with the US Dollar. The Australian Dollar is strongly influenced by the country’s exports, particularly commodities like gold, coal, and iron ore. The US Dollar’s stability adds to the pair’s appeal. This pair reflects Australia’s export-driven economy and is highly sensitive to commodity price fluctuations. Traders interested in capitalizing on global commodity trends often look to AUD/USD for opportunities.

b. USD/CAD

USD/CAD, referred to as “Loonie,” combines the US Dollar with the Canadian Dollar. Canada’s economy is heavily reliant on oil exports, making this pair highly sensitive to crude oil price fluctuations. The US Dollar provides liquidity and stability, while the Canadian Dollar offers insights into global energy markets. This pair serves as a barometer for oil market conditions and attracts traders interested in energy-linked opportunities.

c. NZD/USD

NZD/USD, commonly called “Kiwi,” represents the New Zealand Dollar and the US Dollar. The New Zealand Dollar reflects the country’s agricultural-based economy, particularly its dairy exports. The US Dollar adds liquidity and stability to this pair. NZD/USD is influenced by global risk sentiment and commodity prices, making it a popular choice for traders focusing on agricultural trends and seasonal market dynamics.

3. What are Cross Currencies?

Cross currencies are pairs that do not include the US Dollar. Instead, they consist of two other major currencies, offering traders opportunities to diversify their portfolios and explore unique trading strategies.

a. EUR/JPY

EUR/JPY, sometimes referred to as the “Yuppy,” pairs the Euro, representing the economic power of the Eurozone, with the Japanese Yen, symbolizing Asia’s third-largest economy. This pair reflects the economic relationship between Europe and Asia, making it a vital indicator for cross-market strategies. EUR/JPY is often used in risk-on/risk-off trading strategies, where traders take positions based on global market sentiment. Its strong trends make it a favorite for swing traders.

b. GBP/JPY

GBP/JPY, nicknamed “Guppy,” links the British Pound with the Japanese Yen. The Pound signifies the UK’s role as a global financial hub, while the Yen often serves as a safe-haven currency. This pair is renowned for its high volatility and large price movements, making it an exciting choice for experienced traders. GBP/JPY offers dynamic opportunities but requires strict risk management due to its unpredictable nature.

c. EUR/GBP 

EUR/GBP, also known as the “Chunnel,” combines the Euro, the unified currency of the Eurozone, with the British Pound, reflecting the UK’s independent economic strength. This pair highlights the trade and economic relationships between the Eurozone and the UK. It is often influenced by political events like Brexit and the policies of the European Central Bank and the Bank of England. Traders focus on EUR/GBP to gain insights into European and UK economic trends.

Factors Influencing the Price of Major Currency Pairs

The price movements of major forex pairs are driven by a variety of economic, political, and psychological factors. Understanding these influences is key to successful trading. Below is an in-depth look at the primary factors:

Economic Indicators

Economic indicators like GDP growth, unemployment, and inflation directly influence major forex pairs. Strong GDP and low unemployment typically strengthen a currency, while high inflation can weaken it if not controlled. For example, positive economic data from the Eurozone can boost the Euro against the US Dollar in the EUR/USD pair.

Central Bank Policies

Central banks shape currency values through interest rate decisions and monetary policies. Higher rates often attract foreign investment, strengthening the currency. For instance, a Federal Reserve rate hike can increase the value of the USD, impacting pairs like USD/JPY and GBP/USD. Central bank statements also create market volatility as traders react to potential changes.

Geopolitical Events

Elections, trade agreements, and conflicts significantly impact foreign exchange pairs. Political instability weakens a currency, while stability strengthens it. For example, US elections often lead to volatility in the USD. Additionally, global crises can boost safe-haven currencies like the CHF and JPY.

Market Sentiment

Market sentiment, driven by traders’ risk appetite, influences currency demand. In risk-on environments, currencies like AUD and NZD strengthen, while in risk-off situations, safe-haven currencies like USD and JPY gain traction. Speculative trading further drives short-term volatility in major forex pairs.

Find out whether forex trading is profitable. 

How to Trade Major Currency Pairs

Trading major forex pairs involves a systematic approach to maximize success and minimize risks. Follow these steps to get started:

Step 1: Understand the Currency Market

Begin by learning the basics of forex trading, including how currency trading pairs work and the factors influencing their movements.

Step 2: Choose a Reliable Broker

Select a reliable broker like VT Markets that offers competitive spreads, robust trading platforms, and excellent customer support to ensure a seamless trading experience.

Step 3: Open and Fund Your Trading Account

Open a trading account with your chosen broker and fund it with an amount you’re comfortable risking in the forex market.

Step 4: Select a Currency Pair

Choose a major currency pair that suits your trading style, time zone, and familiarity with the economies involved.

Step 5: Analyze the Currency Pair

Use a combination of technical analysis, such as chart patterns and indicators, and fundamental analysis, like economic calendar and central bank updates, to evaluate potential price movements.

Discover the difference between fundamental analysis and technical analysis. 

Step 6: Place Your First Trade

Execute your trade based on your analysis by deciding whether to take a long or short position on the chosen pair, depending on your forecast.

Explore the 9 best forex trading strategies and techniques. 

Step 7: Implement Risk Management Tools

Utilize risk management tools like stop-loss and take-profit orders to limit potential losses and secure profits, ensuring disciplined trading.

Step 8: Stay Informed

Keep track of global news, economic reports, and market trends to adapt your strategy and make informed trading decisions.

New to forex trading? Learn how to trade forex for beginners. 

Conclusion

Major currency pairs form the backbone of the forex market, offering high liquidity, tighter spreads, and stability. By understanding their characteristics and the factors that influence them, traders can make informed decisions and optimize their strategies. Whether you are a beginner or an experienced trader, mastering these major forex pairs is key to success in the forex market.

Trade Major Currency Pairs with VT Markets

VT Markets offers a seamless trading experience for major forex pairs through industry-leading platforms like MetaTrader 4 (MT4) and MetaTrader 5 (MT5). With tight spreads, advanced tools, and comprehensive educational resources, it caters to both new and seasoned traders. Explore opportunities across foreign exchange pairs with VT Markets, where innovation meets accessibility.

Start trading today and unlock the potential of the world’s most popular currency trading pairs with a trusted broker by your side!

Frequently Asked Questions (FAQs)

1. What are the major currency pairs in forex trading?

These major forex pairs are among the most actively traded in the global market, known for high liquidity, tight spreads, and consistent price action.

• EUR/USD (Euro and US Dollar) – Nickname: Fiber
• USD/JPY (US Dollar and Japanese Yen) – Nickname: Gopher
• GBP/USD (British Pound and US Dollar) – Nickname: Cable
• USD/CHF (US Dollar and Swiss Franc) – Nickname: Swissie
• AUD/USD (Australian Dollar and US Dollar) – Nickname: Aussie
• USD/CAD (US Dollar and Canadian Dollar) – Nickname: Loonie
• NZD/USD (New Zealand Dollar and US Dollar) – Nickname: Kiwi
• EUR/JPY (Euro and Japanese Yen) – Nickname: Yuppy
• GBP/JPY (British Pound and Japanese Yen) – Nickname: Guppy
• EUR/GBP (Euro and British Pound) – Nickname: Chunnel

2. What makes a currency pair a ‘major’?

A currency pair is considered a major if it includes the U.S. dollar and another leading global currency. These major forex pairs are highly liquid and tend to have more predictable price movements, making them ideal for many traders.

3. How are major currency pairs different from minor or exotic pairs?

Major pairs have higher trading volumes, lower spreads, and greater liquidity compared to minor or exotic pairs. Exotic pairs involve emerging market currencies and are often more volatile and expensive to trade.

4. Why are major currency pairs popular among traders?

Because of their deep liquidity, stable spreads, and strong correlation with economic news, major currency pairs allow traders to react quickly to market events and execute trades more efficiently.

5. How do I trade major currency pairs?

Trading major currency pairs requires a structured approach. Follow these steps to get started:

• Step 1: Understand the Currency Market
• Step 2: Choose a Reliable Broker
• Step 3: Open and Fund Your Trading Account
• Step 4: Select a Currency Pair
• Step 5: Analyze the Currency Pair
• Step 6: Place Your First Trade
• Step 7: Implement Risk Management Tools
• Step 8: Stay Informed

6. Are foreign exchange pairs affected by global news?

Yes. Foreign exchange pairs, especially major ones, are highly sensitive to geopolitical developments, economic data releases, and central bank policies. Staying informed is key to making timely decisions.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Best Time to Trade EURUSD: What Every Trader Should Know

The EUR/USD currency pair, being the most traded in the forex market, offers numerous opportunities for traders due to its high liquidity and volatility. However, understanding the best time to trade EUR/USD can significantly enhance your trading success. Timing your trades with market activity is critical, as it directly impacts volatility, spreads, and profit potential.

When is the Best Time to Trade EUR/USD?

The best time to trade EUR/USD is during periods of high liquidity and volatility, typically when the market sees the most activity. This often occurs during the London-New York session overlap (1:00 PM – 5:00 PM GMT), as traders from two major financial hubs are active simultaneously. This period offers tighter spreads, faster trade execution, and greater price movement, making it ideal for both day traders and scalpers. Additionally, key economic data releases, such as the U.S. Non-Farm Payroll (NFP) or European Central Bank (ECB) announcements, often occur during this overlap, driving sharp market movements.

Learn how to trade EUR/USD for beginners. 

Key Economic Events That Impact EUR/USD

Economic events are major catalysts for EUR/USD price movements. Monitoring these events can help traders identify opportunities and prepare for volatility:

1. European Central Bank (ECB)

The ECB plays a critical role in shaping EUR/USD movements. During its meetings, the bank announces key monetary policies, such as interest rate decisions and asset purchase programs. A rate hike signals economic strength in the Eurozone, often boosting the Euro and causing EUR/USD to rise. On the other hand, dovish policies like interest rate cuts or increased quantitative easing can weaken the Euro, leading to a drop in the pair. Traders often monitor these events closely as they can create significant market volatility.

2. US Non-Farm Payroll (NFP) Report

The US NFP report, released on the first Friday of every month, is a major driver of market activity. It measures job creation in the US (excluding farm-related industries) and provides a snapshot of the economy’s health. Strong NFP data typically strengthens the US Dollar, leading to a decline in EUR/USD, while weaker-than-expected results often weaken the Dollar, driving the pair higher. For example, during a strong NFP release, the USD strengthens sharply, providing traders with high volatility and potential trading opportunities.

3. Inflation Data (CPI)

Inflation, tracked through the CPI, is a key indicator of economic stability. Both the Eurozone and the US release monthly CPI data, which central banks use to decide monetary policies. A higher CPI in the Eurozone indicates inflationary pressure, often prompting the ECB to raise interest rates, which strengthens the Euro. Conversely, if US CPI data spikes, the Federal Reserve may adopt a more hawkish stance, boosting the Dollar and lowering EUR/USD. These reports often cause short-term volatility, providing strategic trading windows.

4. Federal Reserve Meetings and Statements

Federal Reserve meetings are closely watched for announcements on interest rates and economic projections. A hawkish stance, signaling future rate hikes, strengthens the USD and typically pushes EUR/USD lower. Conversely, dovish statements hinting at stimulus or rate cuts weaken the Dollar, causing EUR/USD to rise. These meetings provide clear direction on the Fed’s monetary strategy, making them essential for traders aiming to predict currency movements.

5. Geopolitical Developments

Geopolitical events, such as elections, trade negotiations, or unexpected political crises, can cause significant fluctuations in EUR/USD. For instance, during the Brexit negotiations, uncertainty about the Eurozone’s economic stability led to sharp declines in the Euro. Similarly, US elections often create volatility due to changes in fiscal or trade policies. Staying informed about such developments can help traders anticipate potential market shifts.

6. Trade Balance and Economic Health Indicators

Trade balance and PMI reports reveal the economic health of the Eurozone and the US. A trade surplus in the Eurozone usually strengthens the Euro, while a deficit weakens it. Similarly, strong US PMI data reflecting growth in the manufacturing or services sectors can boost the Dollar. These indicators help traders gauge overall economic trends, allowing them to make informed decisions about EUR/USD positions.

The General Trading Hours for Forex Trading

The forex market operates 24 hours a day, divided into four major sessions: Sydney, Tokyo, London, and New York. These sessions overlap, creating periods of heightened activity.

The most active times in forex trading are during session overlaps, such as the London-New York overlap (1:00 PM – 5:00 PM GMT), when trading volumes peak due to the simultaneous participation of traders from both regions. These hours offer the best trading conditions with high liquidity, tighter spreads, and increased volatility.

Periods outside these overlaps, such as late in the Sydney or Tokyo sessions, tend to have lower trading volumes and wider spreads, making them less favorable for trading popular pairs like EUR/USD. Understanding these general trading hours allows traders to optimize their strategies by focusing on the most profitable times while avoiding less active periods.

Learn what forex trading is and how it works. 

Where are the Most Volatile Times for EUR/USD?

Volatility is a key factor that drives trading opportunities in the EUR/USD pair. The most volatile periods often coincide with major market events and specific trading hours, which see heightened activity and liquidity.

Economic Data Releases: The EUR/USD pair experiences significant volatility during major economic data releases. Key events include the US Non-Farm Payroll (NFP) report, Eurozone GDP data, and central bank meetings. These events often drive sharp price movements. 

Example: An unexpected rate hike by the ECB can strengthen the Euro, pushing EUR/USD higher, while a strong NFP report typically boosts the USD, causing the pair to drop. Traders actively monitor these scheduled events to seize trading opportunities.

Overlapping Trading Sessions: The London-New York overlap (1:00 PM – 5:00 PM GMT) is the most volatile trading period for EUR/USD. This overlap combines the activity of two major markets, resulting in high liquidity, tighter spreads, and more pronounced price movements. During this time, key economic announcements often amplify volatility, creating ideal conditions for both short-term and long-term trades. Using tools like stop-loss and take-profit orders is crucial to managing risks effectively during these active hours.

Example: During a London-New York session overlap, a surprise ECB announcement may cause the EUR/USD to break out of a consolidation range, with traders leveraging the high liquidity to enter and exit positions swiftly. This is often accompanied by sharp, decisive trends that offer opportunities for both short-term and swing traders.

Discover the 10 most volatile forex pairs.

How to Trade EURUSD

Learn how to trade EURUSD with the step-by-step guide below:

Step 1: Understand and Analyze the EUR/USD Currency Pair

Start by studying the EUR/USD pair using technical analysis, like the Relative Strength Index (RSI), and fundamental analysis, such as monitoring ECB meetings or US NFP reports. This helps you identify trends and key levels for making informed decisions.

Step 2: Select a Reliable Broker

Choose a reliable broker with competitive spreads, fast execution, and dedicated customer service. Ensure they provide essential tools like real-time data, educational resources, and a user-friendly platform to support your trading needs.

Step 3: Open and Fund Your Trading Account

Register a live trading account with your chosen broker, then fund your account using a secure payment method. Deposit an amount that fits your risk management plan.

Step 4: Open a Trade

Analyze the market, set your entry and exit points, and use limits or market orders to execute trades. Always set stop-loss and take-profit levels to manage risk.

Step 5: Monitor and Close Your Trade

Track your trade’s progress, stay updated on market news, and exit your position when your target is reached or market conditions change.

Discover the 9 best forex trading strategies and techniques. 

Tips for Choosing the Best Time to Trade EUR/USD

Trade During Overlaps: Focus on high-activity periods like the London-New York session overlap, as it offers increased liquidity and volatility, ideal for trading EUR/USD.

Avoid Low-Volume Periods: Steer clear of quieter periods, such as the late Asian session, unless there’s significant news impacting EUR/USD that may create trading opportunities.

Stay Updated: Regularly check economic calendars for high-impact events, such as ECB meetings or US NFP reports, to anticipate market movements and adjust your trades accordingly.

Choose Trading Hours That Suit You: Select trading hours that align with your schedule, ensuring you can fully focus on the market during active periods for EUR/USD.

Use Risk Management Tools: Always use risk management tools like stop-loss and take-profit orders to protect your account from unexpected price swings and manage your risk effectively.

Discover if forex trading is profitable.

Conclusion

Timing is a vital factor in forex trading, especially with the EUR/USD pair. Identifying the best time to trade EUR/USD based on market activity and economic events can enhance your trading outcomes. Whether you’re a day trader or swing trader, aligning your strategy with key trading hours and market overlaps is essential for success.

Trade EUR/USD with VT Markets

VT Markets provides a robust platform with low spreads and advanced trading tools, ideal for trading EUR/USD. Access MetaTrader 4 (MT4) and MetaTrader 5 (MT5) with a user-friendly interface and reliable execution, even during high-volatility periods. Whether you’re timing your trades around key sessions or economic releases, VT Markets ensures you can make the most of the best time to trade currency. Start trading EUR/USD today and enjoy a seamless, professional trading experience with VT Markets.

Not ready to trade EUR/USD? Start with a demo account to practice your strategies and build confidence before diving into the live market.

Frequently Asked Questions (FAQs)

1. What is the best time to trade EURUSD?

The best time to trade EURUSD is during the overlap between the London and New York sessions, typically from 1:00 PM – 5:00 PM GMT. This period sees the highest trading volume and market volatility, offering more opportunities and tighter spreads.

2. When is the best time to buy US dollars?

The best time to buy US dollars often aligns with U.S. market hours or key economic data releases like interest rate decisions, inflation reports, or employment figures. Buying USD during high-impact news can offer better price movement, but also comes with increased risk.

3. Why is EURUSD the most popular currency pair?

EURUSD is the most traded currency pair in the world and a leading major currency pair in the forex market. It offers high liquidity, low spreads, and consistent volatility, making it attractive for traders of all levels. Its popularity stems from the global economic influence of both the U.S. and the Eurozone, allowing traders to capitalise on macroeconomic trends and news events.

4. What is the best time to trade currency overall?

The best time to trade currency is when major markets overlap, especially the London/New York window. This is when liquidity is highest and spreads are usually the tightest, making it ideal for active trading.

5. Does timing really affect forex trading results?

Yes. Trading during high-liquidity hours can lead to better price execution, smaller spreads, and more predictable market behaviour. Understanding market sessions helps you optimise your trading strategy.

Dear Client,

Affected by international holidays, the trading hours of some VT Markets products will be adjusted.

Please check the following link for the affected products:

Notification of Trading Adjustment in Holiday (Update)

Note: The dash sign (-) indicates normal trading hours.

Friendly Reminder:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com