Major currency pairs are some of the most high-profile and hotly traded combinations in the forex market. They offer high liquidity and tight spreads compared to other pairs, helping you trade them efficiently. Learn more about the majors in our in-depth guide.
Below, we walk you through:
The definition of major currency pairs varies, but they're generally the most highly traded combinations of currencies from some of the world's largest economies. Their trading volumes usually drive a significant majority of daily activity in the global forex market.
Five currencies make up four traditional major pairs: the US dollar, euro, Japanese yen, British pound and Swiss franc. These five currencies were among the eight most traded as of April 2022, according to Bank for International Settlements data.
Other currency pairs are commonly classed as majors too, though, as we've detailed below.
Like all pairs in the forex market, major currency pairs pit the value of one currency against another. The difference is the popularity of the currencies involved compared to other typically less frequently traded pairs, known as crosses and exotics.
In the currency pair, the second currency tells you how much you would pay in one currency, known as the quote while for one unit of another, the first currency, known as the base. If one currency in a major pair changes in value, it does so relative to the other, affecting the quoted price.
Read our guide to currency pairs to learn more about how they work and the different types.
While there are four broadly accepted traditional majors as we mentioned, some traders include three or even six more popular variations from commodity and cross categories. We've added a list of all the possible major currency pairs below, along with their common nicknames, so you get the full picture.
Below that, read explanations of the different categories of majors and profiles of the pairs within them, including factors that influence their price movements.
The four ‘traditional’ major currency pairs to trade are EUR/USD, USD/JPY, GBP/USD and USD/CHF. They’re usually among the most traded currency pairs but don’t always represent the top four; the USD/CHF ranked 7th in April 2022.
The EUR/USD is the most traded currency pair in the world, representing two of the largest global economies and accounting for 22.7% of daily forex turnover . It’s nicknamed ‘Fiber’, part in distinction from the GBP/USD ‘Cable’ nickname since the euro is a newer currency, and part because Europe has fast fibre internet networks.
The pair’s immense popularity means that it’s highly liquid and usually trades with tight spreads. It tends to be less volatile than most pairs due to its strong economic foundations, although fluctuations still occur.
Major geopolitical news and events such as Brexit and the US-China trade war of 2020 have caused volatility historically, for example.
Also known as the Gopher, the USD/JPY is the second most traded pair, leading to more low spreads and high liquidity.
One distinction is the pair is usually quoted to two decimal places, not the standard four. This is true for any pair with the yen as the quote currency because of its relatively low value. This is due in part to long-standing economic policies such as low interest rates used by the Bank of Japan to combat low inflation and growth.
The yen is often used by carry traders who borrow it to invest in currencies from countries with higher interest rates. It’s also seen as a ‘safe haven’, meaning it tends to perform well in times of economic uncertainty.
The GBP/USD is the third most traded pair, using the British pound as its base and the US dollar as its quote. It’s colloquially known as ‘Cable’ in reference to the deep-sea cables that carry price information between the financial centres of London and New York.
This market is usually most active around 14:00 GMT as traders from London and New York cross over. The pair often shares similarities with the EUR/USD thanks to the British pound’s correlation with the euro.
The USD/CHF is the final and least popular traditional major currency pair in forex, nicknamed the ‘Swissie’ due to the presence of the Swiss franc. This currency, while hailing from a far smaller economy than the other major contributors, is still popular for its stability, similar to the yen.
When volatility is high, traders move towards the Swiss franc to limit risk. When it’s low, the Swiss franc usually tracks the movements of the euro due to their close economic relationship.
Some traders class the AUD/USD, USD/CAD and NZD/USD as majors due to their high trading volumes and inclusion of the US dollar.
These pairs are commonly known as commodity pairs because of how the Australian, Canadian and New Zealand dollars are influenced by commodity prices.
Informally known as the ‘Aussie’ thanks to its Australian half, the AUD/USD pair is heavily impacted by mining commodities including coal and iron ore, plus agricultural commodities such as beef, wool and wheat.
The Australian dollar also tends to rise when China’s economy grows as they’re close trading partners. The value of the US dollar, meanwhile, has influence as a strong dollar often makes Australian exports cheaper, reducing the relative value of the Australian dollar.
The USD/CAD, the fifth most popular pair, is nicknamed the ‘Loonie’ due to Canada’s $1 coin featuring a loon (bird).
The pair is tied closely to the price of oil due to Canada’s long-standing economic reliance on exports. Price changes – due to production quotas from the Organisation of the Petroleum Exporting Countries (OPEC), for example – can impact the relative value of the Canadian dollar. Oil is priced in US dollars too, so any drop in the value of oil will strengthen the US dollar.
Similar to the Loonie, the ‘Kiwi’ pair is so-called because of the kiwi bird depicted on New Zealand’s $1 coin.
It can pay to monitor how agriculture and international tourism are performing due to their significance for New Zealand’s economy. As with other pairs, pay attention to their central bank policies too, especially if the Reserve Bank of New Zealand and the US Federal Reserve don’t align.
Cross currency pairs don’t feature the US dollar, but the three below remain popular because they combine the other traditional major currencies.
Nicknamed the ‘Chunnel’ in honour of the Channel Tunnel connecting Britain and Europe, the EUR/GBP reflects the interesting relationship between the British pound and the euro.
While the two economies had long been interlinked, the pair experienced significant volatility after the Brexit vote in 2016 when the British pound slumped. The reports and policies of the European Central Bank (ECB) and Bank of England can be telling.
The EUR/JPY pair is nicknamed ‘Yuppy’ or ‘Euppy’ as a simple vocal combination of the two currency names. The pair is still highly liquid, even if not as popular as some majors.
EUR/JPY is vulnerable to many of the factors we’ve described above, such as ECB and Bank of Japan monetary policies. Japan’s significant import and export habits are worth tracking too, as is the relatively common occurrence of natural disasters.
The EUR/CHF gains some of its popularity from the Swiss franc’s safe haven status during wider market volatility. It’s nicknamed the Euro-Swissie for obvious reasons.
Like the GBP/EUR, the pair combines two closely tied economies, though investors have historically turned to the Swiss franc in response to uncertainty in the eurozone. The Swiss franc was pegged to the euro between 2011 and 2015.
There are several reasons why you may want to join many others in adding the major currency pairs in forex to your portfolio:
We’ve touched on many of the specific factors that affect individual majors. Broadly, the following triggers can be important to monitor as a trader:
Read more about what affects forex prices.
Read more about how to trade forex and forex trading strategies.