Trading Discussion What are currency pairs in forex trading?

[Phabbyfundz]

Currency pairs I would say are divided into majors, crosses and exotics. Majors often represent developed countries and are highly liquid with low spreads. They are stable and predictable in relation to other asset classes such as small cap equities and stocks. Majors include EUR/USD, GBP/USD,USD/JPY, USD/CHF, USD/CAD and so on.
Crosses do not include the US dollar in the currency pair and are ideal for diversification. Crosses include GBP/JPY ,EUR/JPB, CAD/JPY, AUD/CAD and so on.
Exotics include a currency from a developing nation or country so they are extremely illiquid with very high spreads. examples include the hong kong dollar (HKD), the Singapore dollar (SGD),, the Russian ruble (RUB), the indian rupie (INR) and more. Also the currencies of the Scandinavian countries are also considered as exotics although they represent developed countries.

 

[Setho]

If you are a forex trader then you should know that you are actually trading the value of the physical currency of one country over another. If you choose to treat the value of the United States dollar over the Euro then you are going to look for a market pair like euro/usd