Community Forex Questions
What are the most liquid currency pairs?
EUR/USD is the most liquid forex pair, accounting for 20-30% of total trading volume in the forex market. The EUR/USD accounted for 24% of all trading volume in April 2019, according to the Bank for International Settlements Triennial Bank Survey.
The USD/JPY pair comes in second, with the Japanese Yen being one of the most heavily traded currencies as well as a major safe-haven currency. According to the same report, the Japanese Yen was the third most traded currency, accounting for 16.8% of all foreign exchange trades.
The British Pound is one of the most popular currencies in the world, so GBP/USD is the third most liquid currency pair.
The Australian Dollar, a major commodity currency, is ranked fourth. The AUD is especially popular when markets are "risk-on" and carry traders are trading the interest rate differential (e.g. buying the high-yielding Aussie Dollar against the low-yielding Japanese Yen).
The USD/CAD is ranked fifth in this list. Canada has one of the world's largest economies and is a major oil exporter. As a result, the price of oil has a significant impact on the direction of the Canadian Dollar.
The USD/JPY pair comes in second, with the Japanese Yen being one of the most heavily traded currencies as well as a major safe-haven currency. According to the same report, the Japanese Yen was the third most traded currency, accounting for 16.8% of all foreign exchange trades.
The British Pound is one of the most popular currencies in the world, so GBP/USD is the third most liquid currency pair.
The Australian Dollar, a major commodity currency, is ranked fourth. The AUD is especially popular when markets are "risk-on" and carry traders are trading the interest rate differential (e.g. buying the high-yielding Aussie Dollar against the low-yielding Japanese Yen).
The USD/CAD is ranked fifth in this list. Canada has one of the world's largest economies and is a major oil exporter. As a result, the price of oil has a significant impact on the direction of the Canadian Dollar.
The most liquid currency pairs in the forex market are those involving major global currencies, traded in high volumes. The most prominent is the EUR/USD (Euro/US Dollar), accounting for the largest share of daily forex transactions. Other highly liquid pairs include USD/JPY (US Dollar/Japanese Yen), GBP/USD (British Pound/US Dollar), and USD/CHF (US Dollar/Swiss Franc). These pairs benefit from significant market participation and tight bid-ask spreads, facilitating easier and quicker trades. Additionally, AUD/USD (Australian Dollar/US Dollar) and USD/CAD (US Dollar/Canadian Dollar) are also notable for their liquidity. The high liquidity of these pairs ensures efficient price discovery and lower transaction costs, making them popular among traders and investors.
Oct 17, 2022 03:53