In the Major pairs, the U.S. dollar (USD) is the base currency or the quote currency, and it's paired with other major global currencies. This means that the value of these currency pairs is expressed in terms of how much of the non-USD currency is needed to purchase one U.S. dollar.
High Liquidity:
The Majors are known for their exceptional liquidity. This liquidity results from the significant trading volumes and widespread participation of financial institutions, central banks, corporations, and retail traders. As a result, Major pairs typically have narrow spreads, making them attractive for traders.
Frequent Trading Activity:
Major currency pairs are actively traded around the clock due to the global nature of Forex markets. They are popular among traders because of their availability for trading at almost any time, allowing traders to respond to market events and news releases.
Reduced Spreads:
Due to their high liquidity, Major pairs tend to have tighter spreads compared to exotic or minor currency pairs. This means that the difference between the bid and ask price is relatively small, reducing the cost of entering and exiting trades.
Key Economic Indicators:
Major currency pairs are closely tied to the economic health and policy decisions of their respective countries. Traders often pay close attention to key economic indicators, interest rates, and geopolitical developments that can influence these currencies.
Examples of Major Currency Pairs:
The Major currency pairs include:
•EUR/USD: Euro/United States Dollar
•USD/JPY: United States Dollar/Japanese Yen
•GBP/USD: British Pound Sterling/United States Dollar
•AUD/USD: Australian Dollar/United States Dollar
•USD/CHF: United States Dollar/Swiss Franc
•USD/CAD: United States Dollar/Canadian Dollar
•NZD/USD: New Zealand Dollar/United States Dollar
These currency pairs are at the core of global Forex trading, and their movements often reflect broader trends and sentiment in the financial markets. Traders and investors closely monitor these pairs for trading opportunities and to gain insights into the overall health of the global economy.
