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Every forex trader has different needs, and there’s no one currency pair that is objectively better than another.
Things like trading strategy, experience level, and market volatility can all influence which currency pairs might be better to use in a given scenario. For instance, trend-following strategies may perform well with pairs like USD/JPY, but range-trading strategies might be better-suited to the stability of pairs like EUR/CHF.
Are there pairs that are more widely traded than others across all levels of experience and skill in addition to across various market conditions? The answer is yes.
It’s with that in mind that we uncover 6 of forex’s most traded currency pairs. While knowing the best pairs to use in every situation comes with experience, more often than not, these pairs are a safe choice for most beginners.
What Are the Most Traded Currency Pairs?
The Bank for International Settlements (BIS) has surveyed activity in foreign exchange markets every three years since 1986.
According to the most recent (2022) BIS Triennial Central Bank Survey, which aggregated data from over 1,200 banks, the global forex market encompasses $7.5 trillion worth of trades each day. The percentages provided represent parts of that total. So as an example, USD/EUR trades make up about 22.7% of $7.5 million, or roughly $1.7 trillion each day.
Note: while rankings have been taking from the BIS, all info about the qualities of each currency pair was sourced from the Investopedia article “Top 6 Most Tradable Currency Pairs”.
1. USD/EUR: 22.7%
With a trading volume of nearly $2 trillion daily, USD/EUR is the most traded currency pair globally. Providing high liquidity, this pair ensures tight spreads. It’s negatively correlated with USD/CHF and positively correlated with GBP/USD.
2. USD/JPY: 13.5%
USD/JPY reacts strongly to interest rate changes and monetary policies from both the U.S. and Japan. It’s positively correlated with USD/CHF and USD/CAD.
3. USD/GBP: 9.5%
Reflecting the strength of both the British and U.S. economies, USD/GBP is highly liquid and heavily traded. Its negatively correlated with USD/CHF and positively correlated with EUR/USD.
4. USD/CNY: 6.6%
Trade relations between the U.S. and China have been volatile in recent years, making this currency pair a more speculative one.
5. USD/CAD: 5.5%
USD/CAD is closely tied to oil prices and interest rate changes in both the U.S. and Canada. It’s negatively correlated with AUD/USD, GBP/USD, and EUR/USD.
6. USD/AUD: 5.1%
Australia’s economy is heavily dependent upon exports, so commodity prices and central bank interest rates heavily affect this currency pair. It’s negatively correlated with USD/CAD, USD/CHF, and USD/JPY.
What Are the Best Types of Forex Currency Pairs for Different Trading Situations?
While the above list of 6 major currency pairs is the most traded, some traders also benefit from looking at currency pairs more broadly, in different categories before further narrowing down which actual pairs to trade.
Forex Major Currency Pairs
Most of the pairs you’ll find in the list above are forex major currency pairs, or the most traded pairs in the market. These pairs are usually a safe bet to trade due to their high liquidity, low spreads, and consistent trends. Most are ideal for beginners, but are also just as often chosen by seasoned traders.
Most Volatile Currency Pairs in Forex
Most beginner traders should avoid volatile currency pairs, which some major currency pairs are at times. But some, more experienced, traders thrive on volatility because it often has the potential for bigger gains (as well as bigger losses). Pairs like GBP/JPY and EUR/AUD, for instance, are known for their large price swings. The more volatile a currency pair, the more risk there is associated with trading it.
Correlated Currency Pairs in Forex
There’s often a correlation of currency pairs and markets in forex due to economic linkages between certain countries. EUR/USD and USD/CHF tend to move inversely, for instance. Understanding these types of correlations by using tools like correlation matrices can help you diversify your trades and better manage risk so your portfolio isn’t overexposed by only positively correlated pairs or only negatively correlated pairs.
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FAQs About Forex Currency Pairs
Which Currency Pair Is Most Profitable in Forex?
While there is no single most profitable currency pair in forex trading, historically, EUR/USD and GBP/USD have been favored.
What Is the Best Currency to Trade Right Now in Forex?
The best currency pair to trade at any given time depends on a variety of factors, especially current market conditions.
Which Forex Pair Is Best for Day Trading?
Pairs with high intraday volatility, like EUR/USD and GBP/USD, are often best for day trading. When day trading, it’s usually best to look for pairs with frequent price movements.
What Is the Safest Currency Pair to Trade?
While no one currency pair is “safest”, frequently-traded pairs like USD/EUR and USD/CHF are considered safer than most due to their high liquidity and lower volatility.
What Pairs Move 100 Pips a Day?
Highly volatile pairs like GBP/JPY or AUD/JPY often move 100 pips or more a day.
