Most Popular Currency pairs
Currencies are traded in pairs; for example the U.S dollar and the Swiss franc (USD/CHF). The currencies in each pair are traded one against the other.
The rate at which the currency pairs are traded is referred to as the exchange rate; the exchange rate is affected by the supply and demand of each currency.
The major currencies traded in the forex exchange market are called the major currencies. The major currencies traded are:
• The United States dollar (USD), which is most currencies are traded against.
• The euro zone euro (EUR)
• The Japanese yen (JPY)
• The British pound sterling (GBP)
• The Australian dollar (AUD)
• The Swiss franc (CHF).
The four major currency pairs are:
• EUR/USD
• USD/JPY
• USD/CHF
• GBP/USD
The pricing and quotation of each currency is determined by its value against another currency. The first currency pair is called the base currency, while the second currency in the currency pair is called the quote currency.
The buy price or bid of a currency represents how much of the quote currency is required to get a unit of the base currency. When the currency pair is sold, you sell the base currency to obtain the quote currency.
The sell price or ask price of a currency pair stands for how much you will receive in the quote currency for selling a unit of the base currency.
