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The Forex market is one of the fascinating markets that exist in today’s global economy. With its expanded trading hours, hundreds of different possible trading pairs and incredible liquidity, it makes for a very fast-paced and dynamic trading ground. Some currencies are traded much more than others, however, for a range of reasons including the strength and growth of the economy and the perceived safety of the currency. We look at five of the most traded pairs of currencies in the Forex market in 2022.
The first pair of currencies that are commonly traded are the US Dollar and the Swiss Frank. Known as “the Swissie”, this combination is particularly attractive due to the stability of the Swiss Frank, given Switzerland’s neutrality and safe haven as a financial storehouse. In times of market volatility, running from the USD to the CHF is a favorite move of many traders. In fact, this trading pair is by far the most popular when markets are volatile, but drops off in popularity when the market is settled and strengthening.
Connected by a tunnel under the English Channel, the currency pair of the Euro and British Pound is aptly referred to as “the Chunnel”. This is a popular pair to trade given the proximity of these two currencies to each other geographically, as well as their long history of trade with each other in goods and services. With the advent of Brexit, the relationship between the two currencies has become more volatile, making it attractive to skilled investors as well.
Two currencies that are a little further from each other geographically, yet also connected through a long history are the British Pound and the US Dollar—known as “the Cable” together. This is a particularly volatile trading pair, courtesy of regular fluctuations in prices, exchange rates and pip movements. As a result, it is popular with day traders and swing traders, who both try to take advantage of the movements between the pair to reap significant profits.
What do you get when you combine two of the world’s largest economies? The most commonly traded pair of currencies—known as “the Fiber”. Since these currencies stem from two of the most reputable economies in the whole world, this is a pair that is very well known for being stable and able to trade in large volumes. Smaller and more frequent earnings can be found in this market, with very low spreads and high liquidity. In fact, it is a good place for beginning Forex traders to learn the ropes—check out these EUR/USD trading sites to get started.
Similar to the Fiber, “the Gopher” combines the US Dollar and Japanese Yen for a partnership between two of the largest, reputable economies. Particularly given that the Yen is prevalent across a lot of Asia, this is one of the more sought-after trading pairs. Traders can expect high liquidity, enabling large volumes of trade at one of the tightest spreads in the Forex market with very little fluctuation.
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