Best Forex Currency Pairs to Trade

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Contributor, Benzinga
February 12, 2024

Trade the best forex currency pairs with eToro as your online trading platform.

Forex currency pairs trading is the process of exchanging one currency for another or the conversion of one currency into another currency.

Unlike stock trading, the forex market is open for the majority of the business week due to differences in time zones. This can make effective trading a more viable option for those who work during the standard exchange hours of 9:30 a.m. to 4 p.m.

But which currencies are worth converting? Benzinga has collected information on the most popular and profitable FX pairs traded by volume. Here's what you need to know.

Disclosure: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Most Traded Forex Pairs

Let's take a quick look at the six best forex pairs to implement into your forex trading strategy.

USD/EURGBP/USD
USD/JPYUSD/CHF
USD/CADAUD/USD

Other Commonly Traded Currency Pairs

EUR/CADEUR/AUD

EUR/JPY
EUR/CHF

EUR/GBP
AUD/CAD

GBP/CHF
GBP/JPY
CHF/JPYAUD/JPY

Understanding Top Traded Forex Currency Pairs

Now you understand a bit more about forex, you'll have to figure out what forex pairs you want to trade. This list is based on historical performance and popularity.

1. USD to EUR

One of the most widely-traded forex currency pairs in the world, USD to EUR, is a shortened way of saying “conversion of United States dollars to euros.”

The euro is a stable currency that represents the European Union and is the official currency of 19 of the 28 members of the European Union. Countries that use the euro include Austria, Belgium, Cyprus, Estonia, France, Finland, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.

The currency pair USD/EURis influenced by political movements that affect either the dollar or the euro in relation to one another. For example, when the European Central Bank intervenes in market activities to strengthen the euro, you can expect the cross of the dollar to the euro to decline.

2. USD to JPY

The Japanese yen (JPY) is the official currency of Japan, and the currency dates back to the Meiji Restoration’s attempt to westernize and modernize the Japanese economy. The yen lost a large amount of its value following the conclusion of World War II but has slowly begun to stabilize after reaching a low following the 1973 oil crisis.

The yen is now commonly held as a reserve currency behind the USD, the euro, and the GBP. Yen is considered to be held under a “dirty float” regime thanks to the Japanese government’s policy of active stability intervention. This means that the value of yen sees a number of daily fluctuations, but the central banks of Japan frequently buy and sell the currency en masse to keep exchange rates under control.

The Japanese government places a high premium on keeping the value of the yen low to cultivate a competitive export market. If you hold USD, you can potentially create large profits by capitalizing on these daily fluctuations if you’re able to buy in at the right time. The exchange rate plays a key role in determining the profitability of currency pair investments.

3. USD to CAD

America’s fiscal neighbor to the north and one of their most important trading partners, it should come as no surprise that the values of CAD and the USD are closely related. The value of the Canadian dollar is also heavily correlated with commodity prices.

In particular, the price of oil has a large amount of influence over the value of the Canadian dollar because Canada’s economy relies heavily on oil exportation. In 2016, oil prices fell to prices not seen in over a decade, and the Canadian dollar also suffered, slumping to an exchange rate of 1.46 CAD to 1 USD.

If you want to exchange USD for CAD, carefully monitor the price of oil to determine the ideal time to buy.

4. GBP to USD

The British pound sterling (GBP) is the official currency of the United Kingdom, used throughout England, Scotland and Wales. Despite the fact that the United Kingdom was an official part of the European Union until the summer of 2016, the United Kingdom never switched over to the euro like most countries in Western Europe.

The GBP is the 3rd most-traded currency, trailing behind the USD and the EUR. Two major events that have significantly influenced the price of the GBP in the last decade. During the years 2007 through 2008, the price of GBP wildly fluctuated due to the worldwide influence of the Great Recession.

In 2007, the GBP reached an all-time high trading at £2.10 per $1 USD—only to crash to a shockingly low £1.40 per $1 USD in 2008, causing many investors to cash out their pounds in exchange for the dollar. Though the pound would recover in the coming years, it would eventually even out to around £1.60 per $1, never again reaching the high of 2007.

The 2nd major influence on the price of GBP was Brexit, the name given to the 2016 vote that would separate Britain from the European Union. Brexit caused the value of the GBP to lose almost 10% overnight and 20% in the months following the vote as investors abandoned the pound for more stable currencies in the wake of negotiations.

5. USD to CHF

The Swiss Franc (CHF) is the official currency of Switzerland. Investors who invest in CHF do so most to protect their assets in times of turbulence. The CHF is largely considered to be a “safe-haven” currency.

This means that in times of volatility, the CHF will usually appreciate when other currencies lose value. On the opposite end of the spectrum, the CHF will often lose value when other currencies are appreciating. During the Great Recession, CHF appreciated against all other currencies except the JPY.

CHF and (to a lesser extent) JPY are 2 of the most popularly traded safe-haven currencies in the world thanks to their low volatility in times of major market movements.

6. AUD to USD

The Australian dollar (AUD) is the official currency of Australia and the 6th most commonly-traded currency pair.

The value of the AUD is closely associated with CAD thanks to the interdependent relationship that the economies of Australia and Canada share. AUD is also intrinsically correlated with the commodities market, as Australia remains 1 of the largest exporters of coal and iron ore in the world.

During the commodity slump of 2015, AUD reached a low point not seen since the 1970s. If you’re interested in holding AUD, you should expect to keep a close eye on the price of these commodities crucial to the Australian economy.

What are Currency Pairs?

Currency pairs refer to two different currencies that are traded against each other in the foreign exchange market. In forex trading, currencies are always quoted in pairs because when you buy one currency, you are simultaneously selling another currency. The first currency in the pair is called the base currency, while the second currency is known as the quote or counter currency.

The exchange rate between the two currencies determines how much of the quote currency is needed to purchase one unit of the base currency. Currency pairs are essential in forex trading as they enable traders to speculate on the movement of exchange rates between different currencies.

Different Types of Forex Pairs

There are three main types of currency pairs:

  • Major pairs: These are the most widely traded currency pairs and consist of the world's most dominant currencies. The major pairs include EUR/USD (euro/US dollar), USD/JPY (US dollar/Japanese yen), GBP/USD (British pound/US dollar), and USD/CHF (US dollar/Swiss franc).
  • Minor pairs: Also known as cross currency pairs, minor currency pairs do not include the US dollar. They involve the major currencies against each other. Examples of minor pairs include EUR/GBP (euro/British pound), GBP/JPY (British pound/Japanese yen), and EUR/AUD (euro/Australian dollar).
  • Exotic pairs: Exotic currency pairs involve one major currency and one currency from an emerging or smaller economy. These pairs are less commonly traded and have higher volatility and spreads. Examples of exotic pairs include USD/ZAR (US dollar/South African rand), GBP/TRY (British pound/Turkish lira), and EUR/THB (euro/Thai baht).
  • Commodity currencies: These are currency pairs that are influenced by the prices of commodities, such as oil, gold, or agricultural products. These pairs include currencies of countries that are major exporters or importers of certain commodities. The value of these currency pairs is often highly correlated to the price movements of the related commodities. For example, the Canadian dollar (CAD) is often considered a commodity currency as Canada is a major exporter of oil. Therefore, the CAD/USD currency pair is influenced by changes in oil prices.

Now, You'll Have to Choose a Forex Broker to Start Trading

Before you begin your forex trading journey, you’ll need to choose a broker to execute your trades. Some of the qualities you’ll want when choosing a forex broker include:

  • Security: The best forex brokers offer a number of layers of security. They allow you to enable two-factor authentication to ensure that you’re alerted every time you log into your account. Work only with well-known forex providers to lessen the chance that you lose money in a hack or breach.
  • Low fees: Even a small change in fees can seriously cut into your trading profits. Keep in mind that some brokers also charge account maintenance fees or only offer limited features and research tools with free accounts.
  • Simple deposits and withdrawals: Ensure you can deposit and withdraw money without any trouble. Long waiting periods are stressful as you wait for money to reach your bank account. Simple deposits ensure that you can fund your next trade in just a few moments.
  • Demo account: While this isn’t a dealbreaker, it helps to have a demo account you can test before spending money. Demo accounts are especially helpful if you're new to forex trading and want to teach yourself how it works.
  • Comprehensive customer service: The best forex brokers offer extended customer service hours and offer at least 2 avenues to contact their support team. Exceptional forex brokers may even offer customer support in several languages, 24/7 telephone support, or chatbot service that uses AI to solve common queries.  

Take the Next Steps to Trading Forex Pairs

Trading forex with a reputable broker is of the utmost importance when it comes to the forex market. Check out this list of top broker you can create a trading account with to start trading forex currency pairs.

  • securely through Plus500's website
    securely through Plus500's website
    Best For:
    Mobile Users
    Rating:
    Read Review
  • securely through Forex.com's website
    securely through Forex.com's website
    Best For:
    Forex Trading in and Outside the U.S.
    Rating:
    Read Review

    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

  • securely through AvaTrade's website
    securely through AvaTrade's website
    Best For:
    Non US Forex Trading
    Rating:
    Read Review
  • securely through FxGlory's website
    securely through FxGlory's website
    Best For:
    Fixed Spreads
    Rating:
    Read Review
  • securely through IG Markets's website
    securely through IG Markets's website
    Best For:
    Forex Execution
    Rating:
    Read Review

    Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

  • securely through eToro Forex's website
    securely through eToro Forex's website
    Best For:
    Demo Accounts
    Rating:
    Read Review

    CFD trading is not available to U.S. users. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

  • securely through HYCM Capital Markets's website
    securely through HYCM Capital Markets's website
    Best For:
    Forex Trading
    Rating:
    Read Review

Get Ready to Trade Forex

Each individual currency pair largely depends upon its interactions with other countries and the exports it produces. Read the news, check current events and consider events impact governments around the world, investor sentiment and currency prices.

Learn what makes countries unique in order to predict which currencies will rise and fall in value based on current economic or political climates. Meet other traders, research online and travel to understand the world. Don’t be afraid to invest in a currency in use halfway across the world. Diversify your investments and become a more worldly person in the process.

Frequently Asked Questions

Q

Which currency pair is most profitable in forex?

A

When it comes to trading forex, there is no single currency pair that can be labeled as the most profitable. Different currency pairs have different levels of volatility and liquidity, meaning that different approaches will be necessary for each one.

Q

What is the safest currency pairs to trade?

A

Different currency pairs have different levels of risk associated with them, so understanding the safest currency pairs to trade can help you make better decisions when selecting what pair to trade.

The three safest currency pairs to trade are the US Dollar (USD), Euro (EUR) and Japanese Yen (JPY). These three currencies are referred to as the “major” pairs and are considered to have the lowest risk.

Q

Why do I need to use forex charts?

A

Forex traders used to make educated guesses about how a currency value will change by observing historical fluctuation patterns. Nearly all charts have personalized setting options to allow you to view a variety of technical indicators like price and volume in order to analyze price movements for a currency pair.

The 3 most commonly used forex charts are bar chartsline charts and candlestick charts. Check out Benzinga’s article on Best Forex Charts for a more detailed breakdown of chart options.

Related content: WHAT MAKES THE FOREX MARKET MOVE?

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About Jay and Julie Hawk

During her financial career, Julie developed world-class expertise in technical analysis, including Elliott Wave Theory, and was deeply involved in initiating research into automated trading and trading signal systems. As a member of the San Francisco Writers’ Guild, Julie regularly wrote trade strategies, educational material, market commentary, foreign exchange newsletters, reports, articles and press releases. In addition, Julie was interviewed for various financial markets magazines and news wires in her professional capacity as a forex and derivatives expert. Since retiring from working at banks, Julie has been writing and editing books and articles about financial markets for companies like Benzinga, as well as trading forex online and mentoring other traders as part of TheFXperts’ financial team.

In addition to trading stock index, forex and commodity futures and options professionally on exchange floors, Jay also has experience trading stocks and options for private investors and trading forex online for his own account. He has also developed extensive experience in performing and using fundamental economic and corporate analysis to inform his trading and investment activities. Jay is also an expert financial writer with particular expertise in reviewing online brokers and investor services.