In Forex, a transaction is a simultaneous buy-sell — buying of one currency and selling the other. Thus, they are traded in pairs and quoted in relation to one another. Example pairs might be the U.S. dollar and the Canadian dollar (USD/CAD) or the Euro and the Japanese yen (EUR/JPY).

In a pair, each currency is constantly fluctuating in relation to the other, like two anchors in a game of tug-of-war. The prevailing price of two currencies from two different nations is the exchange rate. Depending on which currency is stronger now, exchange rates are always changing.

Traders categorize currency pairs into three buckets:

  1. Majors
  2. Crosses
  3. Exotics

The U.S. dollar is always included in all major currency pairs because of the prominent role that the United States has in the world economy. The US dollar is not included in cross currency pairs. But there is a subcategory known as minors, which are crosses that involve any of the major currencies.

If a pair contains one major currency and one currency from an emerging market, it is known as an exotic.

Major Currency Pairs

We’ve listed all the majors below in a handy table. As mentioned, they all contain the US dollar and consequently are the most frequently traded. Because of the prominence of the major currencies in the world economy, price action moves with more frequency within the major pairs. Obviously, that means more opportunities to trade.

Have you ever heard of the term liquidity? The term describes the level of activity in the financial market, and the majors, as you would expect, are the most liquid in the world. There is a correlation of liquidity to volume. In other words, if there are lots of active traders buying and selling a certain pair, the liquidity of that pair is higher. For example, the EUR/USD currency pair is traded with greater volume than the NZD/USD currency pair. Thus, the EUR/USD is more liquid than the NZD/USD.

CURRENCY PAIR COUNTRIES NICKNAME
EUR/USD Eurozone / United States euro dollar
USD/JPY United States / Japan dollar yen
GBP/USD Great Britain / United States pound dollar
USD/CHF United States / Switzerland dollar swissy
USD/CAD United States / Canada dollar loonie
AUD/USD Australia / United States aussie dollar
NZD/USD New Zealand / United States kiwi dollar

Major Cross-Currency Pairs (AKA Minor Currency Pairs)

If a pair does not contain the US dollar, it is called a cross-currency pair or a cross. Minors are also known as major crosses. While the volume of trades within the cross-currency pairs is less than the majors, the crosses still provide plenty of trading opportunities and liquidity.

Crosses that are most actively traded usually contain the three major non-U.S. dollar currencies: Euro, Japanese yen, and Great Britain pound.
We’ve put together some handy tables below of crosses.

Euro crosses

CURRENCY PAIR COUNTRIES NICKNAME
EUR/CHF Eurozone / Switzerland euro swissy
EUR/GBP Eurozone / Great Britain euro pound
EUR/CAD Eurozone / Canada euro loonie
EUR/AUS Eurozone / Australia euro aussie
EUR/NZD Eurozone / New Zealand euro kiwi
EUR/SEK Eurozone / Sweden euro stockie
EUR/NOK Eurozone / Norway euro nockie

Yen crosses

CURRENCY PAIR COUNTRIES NICKNAME
EUR/JPY Eurozone / Japan euro yen OR yuppy
GBP/JPY Great Britain / Japan pound yen OR guppy
CHF/JPY Switzerland / Japan swissy yen
CAD/JPY Canada / Japan loonie yen
AUD/JPY Australia / Japan aussie yen
NZD/JPY New Zealand / Japan kiwi yen

Pound crosses

CURRENCY PAIR COUNTRIES NICKNAME
GBP/CHF Great Britain / Switzerland pound swissy
GBP/CAD Great Britain / Canada pound loonie
GBP/AUS Great Britain / Australia pound aussie
GBP/NZD Great Britain / New Zealand pound kiwi

Other crosses

CURRENCY PAIR COUNTRIES NICKNAME
NZD/CAD New Zealand / Canada kiwi loonie
CAD/CHF Canada / Switzerland loonie swissy
AUD/CAD Australia / Canada aussie loonie
AUD/CHF Australia / Switzerland aussie swissy
AUD/NZD Australia / New Zealand aussie kiwi
NZD/CHF New Zealand / Switzerland kiwi swissy

Exotic Currency Pairs

When one major currency is paired with the currency of a non-major, traders refer to these pairs as exotic currency pairs. Such emerging economies might include Brazil, Mexico, Peru, Greece, or Poland, as an example.

There are quite a few exotics but, depending on your forex broker, you may only see certain exotic pairs offered. Most traders stick to pairs that contain major currencies, and so exotic pairs don’t have the same volume and are therefore less liquid. What you will find is that the spread or transaction costs associated with trading exotic pairs are usually wider. In fact, it’s not uncommon to see spreads on the exotic pairs that are two three or even four times bigger than the EUR/USD or USD/JPY, for example.

We have put together a chart with a few examples of exotics.

A word of caution: since the liquidity is generally lower with exotics, they tend to be far more responsive to economic and geopolitical events. As an example, if Chile experiences a political scandal or unanticipated economic turn, it can cause an exotic pair that contains Chile’s currency to swing unexpectedly and forcefully.

Naturally, traders like numbers and groups and orderly information. And so, there are other common groups of currencies from the world of FX.

CURRENCY PAIR COUNTRIES NICKNAME
USD/BRL United States / Brazil dollar real
USD/CLP United States / Chile
USD/HKD United States / Hong Kong
USD/MXN United States / Mexico dollar mex
USD/PLN United States / Poland dollar zloty
USD/RUB United States / Russia dollar ruble OR Barney
USD/SAR United States / Saudi Arabia dollar riyal
USD/SGD United States / Singapore dollar sing
USD/THB United States / Thailand dollar baht
USD/ZAR United States / South Africa dollar rand

G10 Currencies

The group of 10 or G10 is a group of 11 industrialized nations that have similar economic interests. The currencies of the G10 nations also happen to be the world’s most liquid currencies, due to both economic stability and trading volume.

COUNTRY CURRENCY NAME CURRENCY CODE
Australia dollar AUD
Canada dollar CAD
Denmark krone DKK
European Union euro EUR
Japan yen JPY
New Zealand dollar NZD
Norway krone NOK
Sweden krona SEK

The Scandies

If you are a fan of basic world geography, then you should know where Scandinavia is. It is the region in northern Europe that contains Denmark, Norway, Finland, and Sweden. In terms of FX trading, the Scandies refer to the currencies of Denmark, Norway, and Sweden, specifically.

Interestingly enough, Denmark, Sweden, and Norway at one point in history had merged their currencies to a gold standard called the Scandinavian monetary union. After World War One, the gold standard was abandoned, and the Scandinavian monetary union was no more.

COUNTRY CURRENCY NAME CURRENCY CODE
Denmark krone DKK
Norway krone NOK
Sweden krona SEK

Central and Eastern European Currencies

CEE is the common acronym for Central and Eastern Europe. CEE includes the nations of Central Europe, the Baltics, Eastern Europe, and Southeast Europe (also known as the Balkans). Nations that are part of the CEE include Albania, Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, the Slovak Republic, Slovenia, Estonia, Latvia, and Lithuania.

However, in terms of the FX market, there are only four main CEE currencies of note.

COUNTRY CURRENCY NAME CURRENCY CODE
Czech Republic koruna CZK
Hungary forint HUF
Poland zloty PLN
Romania leu RON

BRIICS

BRIICS is a term that refers to the six major emerging national economies — which include Brazil, Russia, India, Indonesia, China, and South Africa.

COUNTRY CURRENCY NAME CURRENCY CODE
Brazil real BRL
China yuan CNY
India rupee INR
Indonesia rupiah IDR
Russia ruble RUB
South Africa rand ZAR