Forex currency pairs
Currency pairs in the foreign exchange market measure the value of one currency against another. Each pair consists of a base currency (the first currency listed) and a quote currency (the second). The quoted price shows how much of the quote currency is required to buy one unit of the base currency.
The foreign exchange market—also known as the forex or FX market—is the largest and most liquid financial market in the world, with over $5 trillion traded daily. Forex trading involves simultaneously buying one currency and selling another. Common examples include EUR/USD (euro vs US dollar) and GBP/JPY (British pound vs Japanese yen).
Understanding how forex currency pairs work is essential, as they are the foundation of all forex trading strategies.
What is forex currency trading?
The first currency in a forex pair is the base currency, and the second is the quote currency. Traders speculate on whether the base currency will strengthen or weaken relative to the quote currency.
For example, when trading GBP/USD:
Buying the pair means expecting the pound to rise against the US dollar
Selling the pair means expecting the pound to fall against the US dollar
Profit and loss are typically measured in the quote currency. Learn more in our how to trade forex guide.
Bid-ask currency example
Each currency pair has two prices:
Bid price: the price at which you can sell
Offer (ask) price: the price at which you can buy
The difference between these is called the spread, which represents the cost of trading.
The table below illustrates basic bid and offer prices:
Major forex currency pairs explained
There are many currency pairs available, but the most widely traded are known as major forex pairs. These all include the US dollar (USD), which is linked to the world’s largest economy.
What are major forex pairs? Examples and characteristics
The euro and US dollar: EUR/USD
The US dollar and Japanese yen: USD/JPY
The British pound sterling and US dollar: GBP/USD
The US dollar and Swiss franc: USD/CHF
The Australian dollar and US dollar: AUD/USD
The US dollar and Canadian dollar: USD/CAD
The New Zealand dollar and US dollar: NZD/USD
Major pairs are among the most actively traded FX markets because they include the US dollar. According to the BIS 2025 Triennial Survey, the US dollar was on one side of 89.2% of all FX trades in April 2025. Because of their high liquidity, they typically have.[1]
Tighter spreads
More stable price movements
Greater trading activity
These characteristics make them especially popular among both beginner and experienced traders.
What are the most traded currency pairs in forex?
Major forex pairs are the most frequently traded due to their liquidity and global relevance.
High trading volume generally leads to:
Faster execution
Lower transaction costs
More consistent pricing
You can use a demo account to explore how currency-pair pricing works before deciding whether live spread betting or CFD trading is appropriate for you.
Forex pairs with the most pips
A pip (percentage in point) is the smallest standard price movement in a currency pair, typically the fourth decimal place.
For example:
EUR/USD moves from 1.0630 to 1.0631 → 1 pip movement
Pip values are important because they determine:
Profit and loss per trade
Position sizing
Risk exposure
Currency pairs with higher volatility may produce larger price movements, but this also increases risk, particularly for short-term trading.
How forex currency pairs work in trading
Currency pairs are traded as a single instrument. Traders either buy (go long) or sell (go short) depending on their market outlook.
Example:
EUR/USD = 1.3560 / 1.35602 (sell / buy)
The euro is the base currency
The US dollar is the quote currency
To buy EUR/USD, you pay 1.35602 USD per euro.
To sell, you receive 1.3560 USD per euro.
Trading scenarios:
Buy EUR/USD → expect euro to strengthen
Sell EUR/USD → expect euro to weaken
Read more examples of short-selling currencies via spread betting and CFD trading.
How to trade on our forex pairs
Open an account
Deposit funds and start spread betting or trading CFDs. Learn more about spread betting trading.Choose your currency pair
We offer over 330 pairs, including majors, minors and exotics.Build a trading strategy
Decide whether to go long or short based on your market outlook.Stay informed
Follow market news, including interest rate and inflation updates. What is forex trading?Manage your risk
Use tools like stop-loss orders to help manage risk.
Live forex currency rates in pairs
The forex market operates electronically through a global network of banks, without a central exchange. It runs 24 hours a day, five days a week.
This means prices can move in response to global events, including outside normal UK market hours.
What moves forex currency pairs? Key factors
Exchange rates fluctuate based on economic strength, market sentiment, and global events.
Key drivers include:
Interest rates and central bank policy
Inflation and economic growth
Political developments
Global trade flows
Commodity prices can also influence certain currencies. Countries with strong natural resource exports—such as oil or metals—often see their currencies move in line with commodity prices.
Examples include:
Oil-exporting countries
Resource-heavy economies
Forex pair correlation explained
Forex pairs are interconnected, meaning they often move in relation to one another.
For example:
EUR/JPY is influenced by both EUR/USD and USD/JPY
Understanding correlation helps traders:
Avoid overexposure to similar positions
Diversify their portfolio
Identify potential trading opportunities
Correlations can be
Positive (move in the same direction)
Negative (move in opposite directions)
Neutral (no clear relationship)
Potential features of trading major forex pairs
High liquidity can support execution
Tighter spreads may reduce trading costs
Major pairs may be less volatile than some less liquid pairs
Strong economic backing from major global economies, while still carrying market risk
They can still move sharply and cause losses
Interest rates set by central banks are a major factor influencing these currencies, making them central to forex trading strategies.
How to trade forex using currency pairs: beginner guide
Forex trading involves speculating price movements between currency pairs.
There are three main types of currency pairs:
1. Major pairs
Include USD and have the highest liquidity.
2. Minor pairs (crosses)
Do not include USD (e.g. EUR/CHF, GBP/AUD).
They provide exposure to currency relationships that do not include the US dollar, but liquidity and spreads can vary.
3. Exotic pairs
Include currencies from emerging markets.
They tend to have:
Lower liquidity
Wider spreads
Higher volatility
Getting started
Open a live account to start spread betting or trading CFDs
Open a demo account to practice with virtual funds
Final insight
Forex currency pairs are the foundation of the FX market. A strong understanding of how they are structured, how they move, and how they are traded allows traders to make more informed decisions.
[1] Source: Bank for International Settlements, 2025 Triennial Central Bank Survey: OTC FX turnover in April 2025.
The movement in major forex pairs is often more predictable within the FX market, due to the vast amount of knowledge and research that traders have collected over the years. For example, EUR/USD is one of the most traded currency pairs in the world in terms of volume, and therefore, traders tend to have a better understanding of the pair, relative to more exotic crosses. See our guide to the most traded currency pairs.
There are several strategies you could use when trading on currency pairs, depending on the length of the trade, the specific pair and the size of your position. Check out our list of forex trading strategies to find one that suits your trading personality and goals.
There is no definite ‘safest currency’ to trade, due to the liquidity and often volatility of the forex market. However, some currencies are stronger in value than others and can act as a safe haven for investors in times of instability. Read our guide to the 16 strongest currencies in the world.
We offer over 330 forex pairs to trade on our online trading platform, which include major, minor and exotic crosses. You can spread bet or trade CFDs on our currency pairs: visit our forex trading page for more information on costs, spreads and margin rates.
A wide spread between currencies indicates volatility, whereas a narrow spread means that there is a smaller difference between the bid and ask price. Most traders prefer a tighter or narrower spread, as it indicates lower volatility but high liquidity. Our forex trading page has a breakdown of all spreads and margins that we offer on our currency pairs.
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