What Are The Major Forex Currencies Traded?

While there are nearly 200 different currencies on the Forex Market that can be traded, the most often traded are those that below to the main developed countries of the world.

The top 8 major currencies in order of trade are:

USD – United States Dollar
EUR – Euro
JPY – Japanese Yen
GBP – Great British Pound
CHF – Swiss Franc
CAD – Canadian Dollar
AUD – Australian Dollar
NZD – New Zealand Dollar

United States Dollar – USD

Over 80% of all currency trades worldwide involved the USD so it’s probably fair to say that the US dollar is the king of all the currencies. This is especially true since it is most often used as a benchmark in each country against its own currency. That’s why traders pay particular attention to any US economic figures and its effect on the USD to gauge different currency trends.

Euro – EUR

The Euro is the second biggest and most actively traded currency on the Forex market. It’s now the official currency of 27 member states in Europe including Germany, Ireland, Greece, France, Spain and Belgium.

It’s managed by the European Central Bank (ECB) which works as an independent bank responsible for setting monitory policy.

Japanese Yen – JPY

The third most actively traded currency is the Japanese Yen. Japan is actually the second largest individual economy in the world behind the US. The Yen remains a popular currency to trade as it has a very low interest rate for carrying trades and borrowing against.

Great Britain Pound - GBP

The fourth most actively traded currency in the Forex market is the Pound. The UK economy is mainly service based – in particular in the financial industry. It also earns its revenue from oil and natural gas exports.

Interestingly the UK is a member of the European Union but has not adopted the Euro as it’s form of currency.

Swiss Franc – CHF

Considered the world’s most stable economy, the Swiss Franc has a reputation for being a safe bet for investors. So during times of economic or political uncertainly more traders flock to the Swiss Franc.

It has a strong correlation with the Euro and they often move in the same direction at the same time.

The Dollars – Canada, Australia & New Zealand

Canada is considered one of the wealthiest nations in the world and is a leading trading partner with the US. This can mean that often when the US dollar falls, so does the Canadian dollar.

Australia has a strong economy and its currency operates similar to the Canadian dollar with the exception that its main export ties are with the Asian market – particular Japan and China. Since it is less influenced by the US dollar, the Australian currency remained strong through the current global financial crisis.

The New Zealand dollar follows a somewhat similar pattern to the Australian dollar as it has similar commodities.