What Are Forex Currency Pairs?
Forex currency pairs do not involve the physical delivery of the currencies bought or sold, but simply an exchange of contracts for each pair.
Currency is a unit of exchange that has the purpose of facilitating the transfer of goods and services. It mostly takes the form of money.
Currency pairs are always expressed through specific symbols, as required by international conventions. Therefore, each currency has a specific symbol. For more on how these pairs are grouped and traded, see a fuller look at these pairs.
Major Currency Pairs
The following are the main currencies (majors):
- Euro = EUR
- US Dollar = USD
- British Pound = GBP
- Japanese Yen = JPY
- Swiss Franc = CHF
- Canadian Dollar = CAD
- Australian Dollar = AUD
- New Zealand Dollar = NZD
Minor Currency Pairs
Then there are minor currencies (minors), which are currencies that have a lower daily turnover and usually belong to second-tier economies. Among the most important minor currencies are:
- Swedish Krona = SEK
- Norwegian Krone = NOK
- Danish Krone = DKK
- Russian Ruble = RUB
- Polish Zloty = PLN
- Hungarian Forint = HUF
- Turkish Lira = TRY
Exotic Currency Pairs
Finally, there are exotic currencies that belong to emerging economies, usually South America, the Far East, and Africa:
- Chinese Renminbi (Yuan) = CNY
- Indian Rupee = INR
- Hong Kong Dollar = HKD
- Singapore Dollar = SGD
- Thai Baht = THB
- South Korean Won = KRW
- Indonesian Rupiah = IDR
- Brazilian Real = BRL
- Mexican Peso = MXN
- South African Rand = ZAR
The Chinese currency is placed among the exotic ones, despite China now being the second-largest economic power in the world behind the USA, as the USD/CNY exchange rate is still subject to a fixed exchange rate regime with a very narrow fluctuation band.
The low level of the exchange rate is a reason for continuous dispute between the two superpowers, with the United States having long called for a greater appreciation of the Chinese yuan, allowing it to float more freely in the markets to avoid imbalances in international trade.
