Top 5 most traded currency pairs in forex

While there is a large number of currencies in the world, only a few are actively traded. More than 100 currency pairs are traded on the foreign exchange (forex) market, but not all of them are in equal demand. Currency pairs are grouped into three categories: major, minor, and exotic. Majors are the most popular amongst traders.

These are the top 5 most commonly traded forex pairs based on popularity:

EUR/USD
USD/JPY
GBP/USD
AUD/USD
USD/CAD

If you are just a brokerage account away from trading the world's most traded currency pairs, read our best forex brokers article and find the best broker for you today.

If you want to know more about popular currency pairs and why they are popular, keep reading.

Table of contents

Intro
Essence
Measuring the popularity of a currency pair
What does it mean if a currency pair is popular?
FAQ

Essence

There are over 100 forex pairs you can trade in the forex market

Currency pairs are classified as major, minor, and exotic pairs

The US dollar is the most popular and most traded currency in the world

The popularity of a currency pair is based on trading volume

A popular currency pair is less volatile than less popular pairs (i.e. minor/exotic ones)

Measuring the popularity of a currency pair

There are eight major currencies that are traded most often in the forex market (in no specific order): the U.S. dollar (USD), the euro (EUR), the British pound (GBP), the Australian dollar (AUD), the Canadian dollar (CAD), the Japanese yen (JPY), the Swiss franc (CHF), and the Chinese Yuan (CNY).

As you might have noticed, all of the 5 FX pairs mentioned above have USD in them. That is because the US dollar is the most popular currency in the world due to the size and might of the US economy and the trust placed in the greenback. People like to hold it, trade it, and speculate on its strength compared to other currencies. By doing that they pump up its trading volume.

Currency pairs are ranked in terms of popularity according to their trade volume, which translates to either more people trading them, people trading them in higher amounts (with bigger position sizes), or both.

What does it mean if a currency pair is popular?

As a general rule, the most popular currency pairs are the major pairs. They are the most liquid of all, usually offered with tighter spreads. That does not mean you can only trade major pairs, minors are also liquid enough, although the spread tends to be wider in their case.

If you are starting out on your forex trading journey, the best bet is to trade major pairs in the beginning, and venture into buying and selling minor or even exotic pairs once your knowledge and understanding of the forex universe deepens.

FAQ

What is the #1 currency in the world?

The number one currency in the world based on trading volume is the US dollar. It is the most popular and the most traded currency on the forex market producing tremendous trade volume.

Should I trade the most traded currency pairs?

The most popular currency pairs are typically the major currency pairs and you should definitely trade them. They are stable, with a lot of trading volume, high liquidity and low volatility. These pairs are very good ones to trade.

What does major currency pair mean?

Major currency pairs are the most heavily traded currency pairs on the forex market, often containing currencies of stable, developed countries such as the USD.