Forex Major Currency Pairs You Can Trade With
There are numerous Forex major currency pairs that you can trade with. These include the EUR/USD, GBP/USD, USD/JPY, USD/CAD and AUD/USD. Each pair has its own distinct characteristics, so understanding them will help you determine the best way to trade.
EUR/USD
EUR/USD is one of the most popular forex pairs and one of the most traded currencies in the world. There are several reasons for its popularity. One is that it is one of the most liquid pairs in the forex market.
Another reason is its ability to offer a unique combination of liquidity and volatility. The price of the EUR/USD currency pair is determined by the relationship between macroeconomic data.
The Federal Reserve Bank and the European Central Bank play a role in determining the value of the dollar and euro. In addition, the political landscape of the United States and Europe can also affect the value of the currency.
Moreover, the monetary policy of the two central banks plays a role in determining the euro to dollar ratio. Typically, central bankers only intervene when the price of a currency rises above its economic means.
AUD/USD
The AUD/USD currency pair is among the most popular pairs in the forex market. It connects some of the most influential and growing economies in the world.
Australia has a close economic and trade relationship with the United States. This is one of the most important reasons why this pair is so popular.
Another major factor in determining the AUD/USD exchange rate is the interest rate differential between the two countries. A low interest rate could lower the value of the Australian dollar, while a high one would make it more expensive.
The price of the Aussie is highly dependent on commodity prices. Specifically, the coal and iron ore markets are major contributors to the country’s economy. During the commodity slump in 2015, the Australian dollar dropped sharply.
USD/CAD
The USD/CAD major currency pairs are one of the most popular forex pairs. With its high volatility, rich liquidity, and tight spreads, the USD/CAD pair offers a lot of opportunities to earn profits.
If you want to make money trading Forex, it’s important to understand the factors that influence the value of currencies. To do this, you must follow news about currencies and their economies.
One of the most important factors that affects the value of the Dollar is the Federal Reserve Bank (Fed). The Fed makes decisions about interest rates, which are a key attraction for investment.
Another important factor that influences the price of the Dollar is inflation. Inflation is measured by the Consumer Price Index, which tracks the prices of goods and services. Historically, inflation has been lower in the U.S. than in Canada. But the two nations have a long history of trade.
GBP/USD
GBP/USD is one of the most popular forex pairs. It’s also one of the oldest tradable currency pairs in the world. The pound sterling is the base currency of the pair.
The Bank of England (BoE) is the government’s bank and is responsible for monetary policy. When the BoE decides to raise or lower interest rates, it issues a statement. This has a profound impact on the GBP/USD exchange rate.
In addition to the monetary policy, political news can affect the GBP/USD. This is especially true with the recent United Kingdom’s vote to leave the European Union.
While there is some economic volatility with GBP/USD, it remains an important currency pair to watch. It offers good liquidity, tight spreads, and good fills.
There are four major currencies in the market: the US dollar, the euro, the British pound, and the Japanese yen. These currencies are the most traded in the world.
USD/JPY
The USD/JPY pair is one of the most traded pairs on the forex market. Despite the low bid-ask spreads, the pair is highly volatile.
While the most popular currency pair on the Forex market is the US dollar, USD/JPY is the second most traded pair. These two currencies share positive correlations with other forex pairs, including EUR/USD, GBP/USD, CHF/JPY, and AUD/USD.
One major factor affecting the price of USD/JPY is the interest rate differential between the United States and Japan. Another is the Japanese yen’s liquidity.
The Bank of Japan is also a major influence on the value of the yen. It releases rate statements on a monthly basis. Similarly, the Japanese Statistics Bureau periodically releases important data.
The pair is a major indicator of Asian-U.S. trade. In fact, it accounts for almost a quarter of the daily average volume on the forex trading markets.
