Common Currency Pairs in Global Forex Trading

Generally speaking, any two currency pairs can be traded back and forth. Even if common information is not kept about two specific currency pairs with respect to each other, that currency information can be obtained by comparing both of those currencies to the American dollar. The world economy still largely operates based on the US dollar, and for that reason, you can use that dollar as a middle man to trade any two currencies the world has to offer. That said, however, there are some currency pairs that are more commonly traded than their counterparts and these pairs are the focus of the discussion below.

American Dollar and European Dollar:

This particular currency pair is also known as the EUR/USD or the USD/EUR depending on the particular point of view to trading that you bring to the table. It is also arguably the most traded currency in the world when the major conventional traders are removed from the picture which essentially means that most of the individual traders that enter the Forex market through online channels eventually settle on trading these two currencies back and forth. Over the long run, there has been a steady gain of the EUR on the USD and over the short run there is enough volatility in the market to allow you to make multiple trades on trends a day if that is what you want to do.

American Dollar and British Pound:

This particular currency pair is also known as the USD/GBP or the GBP/USD currency pair. This used to be the most common currency pair traded in the world and might still be the most common one traded if you put the conventional large traders back into the picture. There tends to be far less short term volatility in this market which is perhaps why individual traders prefer the EUR/USD to this one.

American Dollar and Canadian Dollar:

This one is also known as the USD/CAD or the CAD/USD. While not a particularly common trade made on a worldwide scale you will see this trade quite often in the North American market. Even outside conscious Forex trading there are hundreds of exchanges between these two currencies everyday because of the close relationship the two parent countries have.

European Dollar and British Pound:

Also known as the EUR/GBP or GBP/EUR. This is a very popular trade in Europe and particularly in the United Kingdom but on a worldwide basis it is generally a better bet to go with the EUR/USD currency pair because of the greater volatility that market brings to the table.

Chinese Yuan and Japanese Yen:

This is the CHY/JPY or the JPY/CHY currency pair. This trade is very popular in Asia and like the CAD/USD trade also occurs quite often outside of conscious currency trading with the number of people that travel back and forth between areas that have these two pairs.

These are by no means the only currency pairs available for you to trade as stipulated in the introduction, but they are definitely some of the more popular ones. Every reputable and decent quality online Forex software will automatically have at least these five currency pairs programmed into them and a good number of the software packages you can find on the internet will have many more as well as custom options that you can use to track your own currency pairs.

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