Currency Pairs

Currency Pairs:

When we take a trade, there are two currencies are involved in that particular transaction.  That means, when we Buy one currency, we Sell another currency.  For example, if we Buy EUR/USD;

We bought Euro against US Dollar.  That means, we bought Euro and sold US Dollar.  Vice versa, if we sell EUR/USD,

We sold Euro against US Dollar.  That means, we sold Euro and bought US Dollar.

Here, the first currency is called Base Currency and the second one is called Quote Currency.  There are so many currency pairs in Forex market.  They are divided into Major, Minor and Exotic Pairs.  But Major Pairs are mostly traded.

Major Currency Pairs:

These Major Currency Pairs contain US Dollar one side and are frequently traded.  But, out of them, EUR/USD, GBP/USD, USD/JPY and USD/JPY pairs are most liquid and widely traded in the world.

Major Currency Pairs

Minor Currency Pairs:

Currency Pairs that don’t have USD are called as Cross Currency Pairs, Crosses and Minors.

Minor Currency Pairs

Exotic Pairs

Exotic Pairs are made up of one Major Currency with an emerging country’s Currency, such as, Hong Kong, Singapore, South Africa, etc.,

With some Brokers, you can see some of those pairs.  But keep in mind that they are low liquid Pairs and transaction charges are bigger.

Exotic Currency Pairs

About Srinivas Matcha

Leave a Reply

Powered by