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Forex trading is the simultaneous buying of one currency and selling another. Currencies are traded through a broker or dealer, and are traded in pairs.

For example the euro and the U.S. dollar (EUR/USD) or the British pound and the Japanese yen (GBP/JPY).

When you trade in the forex market, you buy or sell in currency pairs.

Buying and Selling in Currency Pairs

Imagine each currency pair constantly in a “tug of war” with each currency on its own side of the rope. Exchange rates fluctuate based on which currency is stronger at the moment.

Major Currency Pairs

EUR/USD Currency Pair

The currency pairs listed below are considered the “majors.

These pairs all contain the U.S. dollar (USD) on one side and are the most frequently traded.

The majors are the most liquid and widely traded currency pairs in the world.

CURRENCY PAIRCOUNTRIESFX GEEK SPEAK
EUR/USDEurozone / United States“euro dollar”
USD/JPYUnited States / Japan“dollar yen”
GBP/USDUnited Kingdom / United States“pound dollar”
USD/CHFUnited States/ Switzerland“dollar swissy”
USD/CADUnited States / Canada“dollar loonie”
AUD/USDAustralia / United States“aussie dollar”
NZD/USDNew Zealand / United States“kiwi dollar”

Major Cross-Currency Pairs or Minor Currency Pairs

Currency pairs that don’t contain the U.S. dollar (USD) are known as cross-currency pairs or simply as the “crosses.”

Major crosses are also known as “minors.”

The most actively traded crosses are derived from the three major non-USD currencies: EURJPY, and GBP.

Euro Crosses

CURRENCY PAIRCOUNTRIESFX GEEK SPEAK
EUR/CHFEurozone / Switzerland“euro swissy”
EUR/GBPEurozone / United Kingdom“euro pound”
EUR/CADEurozone / Canada“euro loonie”
EUR/AUDEurozone / Australia“euro aussie”
EUR/NZDEurozone / New Zealand“euro kiwi”
EUR/SEKEurozone / Sweden“euro stockie”
EUR/NOKEurozone / Norway“euro nockie”

Yen Crosses

CURRENCY PAIRCOUNTRIESFX GEEK SPEAK
EUR/JPYEurozone / Japan“euro yen” or “yuppy”
GBP/JPYUnited Kingdom / Japan“pound yen” or “guppy”
CHF/JPYSwitzerland / Japan“swissy yen”
CAD/JPYCanada / Japan“loonie yen”
AUD/JPYAustralia / Japan“aussie yen”
NZD/JPYNew Zealand / Japan“kiwi yen”

Pound Crosses

PAIRCOUNTRIESFX GEEK SPEAK
GBP/CHFUnited Kingdom / Switzerland“pound swissy”
GBP/AUDUnited Kingdom / Australia“pound aussie”
GBP/CADUnited Kingdom / Canada“pound loonie”
GBP/NZDUnited Kingdom / New Zealand“pound kiwi”

Other Crosses

PAIRCOUNTRIESFX GEEK SPEAK
AUD/CHFAustralia / Switzerland“aussie swissy”
AUD/CADAustralia / Canada“aussie loonie”
AUD/NZDAustralia / New Zealand“aussie kiwi”
CAD/CHFCanada / Switzerland“loonie swissy”
NZD/CHFNew Zealand / Switzerland“kiwi swissy”
NZD/CADNew Zealand / Canada“kiwi loonie”

Exotic Currency Pairs

Exotic Currency Pairs

No, exotic pairs are not exotic belly dancers who happen to be twins. Exotic currency pairs are made up of one major currency paired with the currency of an emerging economy, such as Brazil, Mexico or Hungary.

The chart below contains a few examples of exotic currency pairs. Wanna take a shot at guessing what those other currency symbols stand for?

Depending on your forex broker, you may see the following exotic currency pairs so it’s good to know what they are.

Keep in mind that these pairs aren’t as heavily traded as the “majors” or “crosses,” so the transaction costs associated with trading these pairs are usually bigger.

CURRENCY PAIRCOUNTRIESFX GEEK SPEAK
USD/BRLUnited States / Brazil“dollar real”
USD/HKDUnited States / Hong Kong
USD/SARUnited States / Saudi Arabia“dollar riyal”
USD/SGDUnited States / Singapore
USD/ZARUnited States / South Africa“dollar rand”
USD/THBUnited States / Thailand“dollar baht”
USD/MXNUnited States / Mexico“dollar mex”
USD/DKKUnited States / Denmark“dollar krone”
USD/SEKUnited States / Sweden“dollar stockie”
USD/NOKUnited States / Norway “dollar nockie”
USD/RUBUnited States / Russia“dollar ruble” or “Barney”
USD/PLNUnited States / Poland“dollar zloty”

It’s not unusual to see spreads that are two or three times bigger than that of EUR/USD or USD/JPY. So if you want to trade exotics currency pairs, remember to factor this in your decision.

G10 Currencies

The G10 currencies are ten of the most heavily traded currencies in the world, which are also ten of the world’s most liquid currencies.

Traders regularly buy and sell them in an open market with minimal impact on their own international exchange rates.

COUNTRYCURRENCY NAMECURRENCY CODE
United StatesdollarUSD
European UnioneuroEUR
United KingdompoundGBP
JapanyenJPY
AustraliadollarAUD
New ZealanddollarNZD
CanadadollarCAD
SwitzerlandfrancCHF
NorwaykroneNOK
SwedenkronaSEK
DenmarkkroneDKK

BRIICS

BRIICS  is the acronym coined for an association of five major emerging national economies: Brazil, Russia, India, Indonesia, China and South Africa.

Originally the first four were grouped as “BRIC” (or “the BRICs”). BRICs was a term coined by Goldman Sachs to name today’s new high-growth emerging economies.

BRIICS is the term used by the OECD, the rich-country think tank adds Indonesia and South Africa.

COUNTRYCURRENCY NAMECURRENCY CODE
BrazilrealBRL
RussiarubleRUB
IndiarupeeINR
IndonesiarupiahIDR
ChinayuanCNY
South AfricarandZAR