5 Top Currency Pairs To Trade In Forex
Flexibility with popular currency pairs is always a great advantage for traders. There are several popular currency pairs that make trading much easier.
Here we are discussing 5 of the most popular and liquid currency pairs that are very preferred by traders.
1. EUR / USD: The EURO and the US Dollar are two of the most popular currencies in the world. So, good liquidity between them exempts the traders from great hassle. The EURO to USD currency pair is considered the most widely traded forex pair. Its high liquidity makes it less volatile than other famous currency pairs. Though most liquid instruments can also become highly volatile in certain conditions, this currency pair is a very convenient option for most traders.
2. USD / JPY: JPY can be considered as ‘safe haven’ currency during periods of Global Economic uncertainty. So, the currency pair of such a stable currency JPY and the most widespread currency USD is often termed as the second most traded forex pair in the world. Although JPY can be impacted by political and economic events in China and Korea, this currency is mostly known as the “Gateway to the East”. The combination of USD and JPY is named “The Gopher”. It has many advantages such as high liquidity and the tightest spread in the forex market. So, it can reduce the overall costs of the trade.
3. GBP / USD: The ‘Cable’ or the first currency pair to be traded via telephone lines or cables spread across the Atlantic Ocean is the currency pair of the British Pound to US Dollar. Though the United Kingdom and the United States share very strong trade relations, the ongoing uncertainty causing UK’s plans to exit the EU (‘Brexit”) has made the GBP / USD currency pair greatly volatile. The heavy trade of the pound against the Euro is reflected in the EUR / GBP gross pair. The GBP / USD pair is preferred by day traders for taking advantage of price fluctuations by dipping in and out of the market quickly and precisely. Due to this advantage, this currency pair is preferred in swing trading also.
4. USD / CAD: The US Dollar to Canadian Dollar currency pair is popular with the nickname “Loonie”. As Canada is a large exporter of oil, minerals, and grains, the Canadian Dollar is strongly tied to commodities trading. As international trade flows in these commodities bring strong liquidity in this currency pair, it can also face high volatility.
5. AUD / USD: Australia is a large exporter of commodities like natural gas, coal, iron ore, and agricultural products. So, the AUD /USD currency pair receives very strong liquidity due to international trade flows in those commodities. This currency pair was regarded as the third most popular currency pair at certain times. However, this currency pair also faces high volatility sometimes. These are the 5 most popular forex currency pairs that are hugely used in trading. At VFM Brokers, we provide you services with most of the popular currency pairs. To know more and to avail our services, feel free to contact us. Also, visit our blog page to know more about various trading methods.