Currency Pairs

Currency PairsCurious what is the market that is open non-stop during the week, it’s worldwide and has the biggest volume of turnover? It’s the Forex market and people from all over the world trade currency on it. This market appeared as a result of a need for a central place where currencies from all over the world could be traded. These days, this market is the biggest financial market, which is normal when you think just how much trade there are these days in the world. There is a huge amount of trade between countries and it’s only normal that the Forex market will reflect that. The trades on the Forex market are done as an exchange which is done with currency pairs. It’s not actual buying or selling, since there are no goods involved. The currency pair is involved in a form of barter instead. In this article you will find out what are the most important currency pairs when it comes to Forex trading.

These currency pairs have more importance during certain parts of the day usually, since the most trade of a currency will be done during business hours in that country. The Forex market is open non-stop, so there are always trades and the exchange rate will vary from hour to hour or even from one minute to another.

Trading Forex means selling or buying currencies and it’s all done in currency pairs, always two currencies involved and exchange for one another. When you’re trading the currencies, you’re doing it based on their value in relation to the other currency. For that reason, a currency pair is a quote with the abbreviations, after which a value listing follows, which shows the base currency’s value, as it relates to the other currency.

An example of a quaote which is often used is EUR / USD 1.31, which tells the viewer that in exchange for 1 Euro you can get 1.31 USD. In this example the Euro is the base currency and the USD is the counter currency.

As you probably expect, the currency which dominates the world’s economy right now, being the strongest and most dominant, is the USD (US dollar). All the major currency pairs in the world have the USD as one of the two currencies, because the country’s economy is so huge. The reference which is preferred by almost everyone is the US dollar and a huge volume of currency transactions involves it. The US dollar is also the currency which is most often used as a reserve currency by countries from all over the world. Below you can read about the currency pairs which offer the most liquidity on the Forex market. As you can see, they all involve the use of the USD as one of the currencies in the pairs.

The first currency pair in the world is EUR / USD (Euro to US Dollar). The second one is USD / JPY (US Dollar to Japanese Yen). The rest of the currency pairs are British Pound Sterling to US Dollar, Australian Dollar to US Dollar, US Dollar to Swiss Franc and finally, US Dollar to Canadian Dollar.

These currency pairs change in value all the time, since exchange rates fluctuate constantly. One important factor which influences the values of the exchange rate is the amount of trade which is done between the two countries and the rapport between export and import volumes. This is not the only thing which influences the exchange rate though. There are a lot of things which can make the exchange rate to fluctuate, from economic events to political decisions, natural disasters and wars.

When you’re looking to find out the most recent exchange rates between currency pairs, you should look for a site which gives you live Forex reports.

The most traded currency pairs in the world show you which the countries with the most powerful economies are. The amount of trade which is done by these countries makes the currency popular and more in demand.

Understanding how these currency pairs work and how their exchange rate is influenced by the events of the world will help you make much more money on the Forex market.

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