The biggest currency pair is obviously the EUR/USD while the ten most popular currencies are the following in a descending order: USD, EUR, JPY, GBP, CNY, AUD, CAD, CHF, HKD, and SGD. This is according to the BIS Triennial Central Bank Survey which is the most comprehensive source of information of the global over-the-counter (OTC) markets in foreign exchange (FX) and interest rate derivatives. The researchers published the latest survey in April 2022.
What is the BIS survey?
The main aim of the survey is to increase transparency around OTC markets so that central banks and market participants can monitor the global financial markets and contribute to discussions concerning OTC market reforms.
The BIS survey is conducted triennially since 1986. It provides a snapshot of market activity during a single month, usually in April. This particular version covered 120 countries and involved data collection from 2,400 banks.
Reporting dealers source flows from their sales desks regardless of the trading venue, capturing transactions between related entities within the same group, such as back-to-back trades, in an unconsolidated manner.
The most trending currency pairs
The most liquid pairs are EUR/USD (euro/US dollar), USD/JPY (US dollar/Japanese yen), GBP/USD (British pound/US dollar), AUD/USD (Australian dollar/US dollar), USD/CAD (US dollar/Canadian dollar), USD/CNY (US dollar/Chinese renminbi), and USD/CHF. The economy of each country is different, influenced by technical indicators, geopolitical events and market sentiment.
Top currency pair EUR/USD (Euro/US Dollar):
The EUR/USD pair is commonly referred to as “Eurodollar” and it is the most liquid currency pair in the forex market. It is the value of the euro against the main reserve currency which is the US dollar.
Traders and speculators who forecast the strength or weakness of the euro against the US dollar closely watch the EUR/USD pair. Both short-term and long-term traders prefer this pair mainly because of liquidity and narrow spreads.
USD/JPY (US Dollar/Japanese Yen):
The USD/JPY pair, which is also called the “Dollar Yen,” is a major currency pair that is greatly influenced by the economic policies of both the United States and Japan. It is the relationship between the US dollar and the Japanese yen, which means that it reflects the economic strength and monetary policy of the United States and Japan.
Traders often use this pair to measure market sentiment and risk appetite of investors. Safe-haven currencies, such as the yen and the dollar, are in great demand in times of global uncertainty.
GBP/USD (British Pound/US Dollar):
The GBP/USD pair, or “Cable,” is the exchange rate between the British pound sterling and the US dollar.
Its story began in the 19th century when exchange rates transmitted via underwater cables. Marking it as one of the oldest currency pairs.
This major pair is in turn driven by economic data, central bank decisions, and geopolitical events. With volatility frequently spiking during Brexit-related or political events (UK elections) and UK economic releases.
AUD/USD (Australian Dollar/US Dollar) currency pair:
The AUD/USD pair, also known as the “Aussie,” is the exchange rate between the Australian dollar and the US dollar. It is highly dependent on commodity prices. Particularly those of gold and iron ore, because Australia is a major supplier of these commodities.
The pair is also highly sensitive to Chinese economic data due to Australia’s close economic relations with China. Traders usually use the AUD/USD pair to speculate on global risk sentiment and commodity price trends.
USD/CAD (US Dollar/Canadian Dollar):
The USD/CAD pair, also called the “Loonie,” is the exchange rate between the US dollar and the Canadian dollar. The pair is driven by the price of oil as Canada is a major oil exporter.
Economic indicators like employment data, inflation and interest rate disparities between the US and Canada are among the factors affecting the currency pair. Traders usually view the USD/CAD pair as a barometer for oil prices and general market risk sentiment.
USD/CNY (US Dollar/Chinese Renminbi):
The USD/CNY pair is the quotation of the US dollar and the Chinese renminbi (yuan). The USD/CNY is affected by factors like trade tensions, monetary policy decisions, and economic reforms in China.
Being the second-largest economy in the world, economic events and releases in China tend to have a crucial impact on global financial markets, increasing demand for the USD/CNY pair by traders across different countries.
USD/CHF (US Dollar/Swiss Franc):
The USD/CHF currency pair, commonly referred to as “Swissie,” represents the exchange rate between the US dollar and the Swiss franc. It is usually regarded as a “safe-haven” pair, since the Swiss franc has traditionally been known for its stability and neutrality.
Various elements like geopolitical conflicts, risk sentiment, and monetary policy decisions of the Swiss National Bank (SNB) and the US Federal Reserve (Fed) influence the pair. Dealers often use the USD/CHF pair as a hedge against market volatility and geopolitical turmoil.
Why are these trending currency pairs always the top choice for traders?
Trading major currency pairs provides many options for traders to explore global trading opportunities and expand their portfolio.
Liquidity
The most traded currency pairs such as EUR/USD, GBP/USD, and USD/JPY normally have high volumes. Resulting in easy execution and tight bid-ask spreads.
Market stability
These pairs are therefore less prone to unexpected movements than exotic and minor currency pairs, adding to the stability of the market.
Information availability
The major currency pairs are the ones that attract a lot of market attention. Ones that are constantly analysed and discussed in the news.
Lower trading costs
As a result of their high liquidity, the top currency pairs tend to have lower transaction costs. Thereby being more cost-effective options for traders.
Diverse trading opportunities
Each major currency pair represents economies with distinctive peculiarities. Providing several different trading opportunities based on economic politics and geopolitics.
Accessibility
Major currency pairs are generally available on trading platforms, so they are accessible to traders of all experience levels.
Established trends
Major currency pairs typically exhibit well-defined trends with a clear direction. That allows traders to place their trades with greater confidence.
Trading Currency pair with T4Trade
If you are ready to begin trading your desired currency pairs, the best option will be T4Trade. The trusted broker is famous for its outstanding services and tools and has a lot of resources to help all traders to improve their trading skills.
By using T4Trade, you have the option to add to your trading portfolio and discover a wide range of popular currency pairs. Traders can start trading the most popular currency pairs but also find less popular pairs with high potential.
T4Trade has low spreads and low trading fees that make trading affordable for traders who trade popular currency pairs. Traders are capable of controlling their trades better and as a result make more lucrative profits due to lower spreads.
T4Trade enables traders to use cutting edge trading tools like indicators and different executing options. Traders can easily explore the user-friendly T4Trade Web Trader App or the customisable MetaTrader 4 (MT4) platform as they get to access real time market data. Technical indicators and charting tools that help them to make informed trading decisions.
T4Trade offers a wide range of free educational services, such as daily educational webinars. Podcasts that help traders to become more efficient and up to date on what is actually going on in the FX market. Articles, eBooks and other useful resources are also available.
T4Trade’s customer support is always ready and available 24/5 to help all traders with any queries they may have about trading. Whether you need to contact customer care via live chat or email, you will definitely get support immediately.
Disclaimer: This material is for general informational and educational purposes only and should not be considered investment advice or an investment recommendation. T4Trade is not responsible for any data provided by third parties referenced or hyperlinked in this communication.
