Before trading Forex, traders need to know the base currencies because not all are popular. Moreover, the rise or fall of a country's currency depends on its policies, administration, news, and international relations.

What are Forex Major Currency Pairs?

Forex Major Currency Pairs are the most actively traded major currency pairs on the foreign exchange market, or currency pairs with the US Dollar (USD) as the base or quote currency. Since the United States is considered the world's largest economy, its major currency pair is primarily determined by its economic strength and stability.

Example of Major Currency Pairs

The 7 major currency pairs are the most traded in the world. The 1st to 4th major currency pairs will be the most popular as they are members of the G10 group, the world's largest importer of agricultural products. Therefore, these countries' currency exchanges are often high fiat and are always exchanged.

1) Euro and US Dollar (EUR/USD)

2) US Dollar and Japanese Yen (USD/JPY)

3) British Pound and US Dollar (GBP/USD)

4) US Dollar and Swiss Franc (USD/CHF)

5) Australian Dollar and US Dollar (AUD/USD)

6) US Dollar and Canadian Dollar (USD/CAD)

7) New Zealand Dollar and US Dollar (NZD/USD)

What Determines the Price of a Currency Pair?

Generally, the price of major currency pairs is a floating rate, causing the price of major currency pairs to fluctuate according to market forces based on the supply and demand principle. If a currency has high demand, it will increase in price. Conversely, if a currency has low demand, its price will fall.

However, even though the currency is based on market mechanisms. The central bank may also intervene in the currency because the central bank is an institution that must control the stability of the economy and currency. If turbulence occurs, it will affect the economy and populace. The universal acceptance of central bank intervention is based on the country's situation.

Benefits of Trading Major Currency Pairs

1. Major currency pairs are highly liquid and can be traded 24 hours a day, 7 days a week.

2. Highly liquid currency pairs give major pairs tighter spreads than other pairs, help reduce trading costs, and increase profit margins.

3. Major currency pairs are less likely to depreciate or drastically decline in value.

Conclusion

In conclusion, traders' most popular currency pairs are the major currency pairs because they constantly fluctuate due to trading pressure. Major currency pairs are suitable for all types of traders. Especially for beginner traders because trading minor currency pairs have a more volatile price. However, traders should practice trading and keep up with the news that may affect the currency to trade effectively.

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