Most Popular Forex Currency Pairs to Trade
The concept of popularity, in Forex Trading, is perfectly combined - and almost interchangeable - with that of liquidity. The most popular currency pairs, in fact, are such because they are the most liquid. And, conversely, the most liquid currency pairs are such because they are more popular. For the record, a "liquid" pair is a pair that is traded often and by many traders, and presents the best profit opportunities.
Below is a quick overview of the most popular currency pairs in Forex Trading.
Euro-US Dollar. Symbol: EUR/USD. It is the most liquid pair of all, with a daily volume that exceeds, just to give an idea, the entire amount of Italian public debt. It could not be otherwise, given that the US economy and the Euro-Zone economy are the most important and wealthy on the planet. However, this pair typically has a negative correlation with the USD/CHF and a positive correlation with the GBP/USD.
US Dollar-Yen. Symbol: USD/JPY. This pair, also very liquid, is mainly influenced by the political situations of the respective countries, as well as by the performance of their economies (obviously). It tends to have a positive correlation with the USD/CHF, as well as with the USD/CAD.
Pound-US Dollar. Symbol: GBP/USD. This pair is very important as it is linked to the two major financial centers in the world. It has a negative correlation with the EUR/USD and a negative correlation with the USD/CHF.
Euro-Pound. Symbol: EUR/GBP. The pair is linked to the two largest European economies. Recently, it has been greatly affected by the decidedly strained relations between the European Union and the United Kingdom. The feeling is that in the coming years, Brexit, or rather the negotiations recently initiated, could play a crucial role for this pair.
US Dollar-Canadian Dollar. Symbol: USD/CAD. It is a sui generis pair as Canada follows, or at least in the past it has done so assiduously, the American monetary policy. However, it is negatively correlated with the AUD/USD, the GBP/USD, and the EUR/USD.
Australian Dollar-US Dollar. Symbol: AUD/USD. This pair, very liquid but not exceptionally liquid, is negatively correlated with the USD/CAD, the USD/CHF, and the USD/JPY.
US Dollar-Swiss Franc. Symbol: USD/CHF. The franc, before the intervention of the Swiss central bank which eliminated the cap that regulated its revaluation, was considered - but is still considered to some extent today - as an excellent safe-haven asset. However, the pair is negatively correlated with the EUR/USD and the GBP/USD.
