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Top 5 most-traded forex pairs in summer 2019 and beyond

08:34, 8 October 2019

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most-traded forex pairs in summer 2019

Forex is the only market that never sleeps. The all-year-round premier financial market of the world, Forex connects people from different countries and reflects the financial dynamics of the world’s trade. Are you ready to join it? Take a closer look at the most-traded currency pairs this summer and choose your personal favourites.

What are the top-traded currency pairs this summer?

Stepping into the Forex market you risk to find yourself overwhelmed with the infinite list of currency pairs at your disposal. Still, we somehow manage to make a choice. So, what are the traders’ favourite forex pairs so far? The is now one straightforward answer, however, there are several universally acknowledged forex leaders for you to follow.

  • Are majors still on top?

  • Sure, they are.

Not surprisingly, the world’s dominant and strongest currency for many years in a row is the US dollar. Its popularity is reasoned by the sheer size of the US economy, still considered the world’s largest. 

The premier global reserve currency, USD is often used as a preferred reference in numerous forex transactions worldwide.

Although the ‘best’ here is not the same as the ‘most liquid’, the following five most traded currencies and their pairs occupy the majority transactions on the foreign exchange market:

  • EUR/USD (Euro – US Dollar)

  • USD/JPY (US dollar – Japanese Yen)

  • GBP/USD (British Pound – US Dollar)

  • AUD/USD (Australian Dollar – US Dollar)

  • USD/CHF (US Dollar – Swiss Franc)

This list of major currency pairs never loses its popularity, disregarding the season, economic and geopolitical environment around the world. They naturally represent the countries with greater financial power. Usually, they are highly volatile, which makes them even more attractive among CFD forex traders.

  • Does it make them the best?

  • Not really.

High volatility and worldwide popularity doesn’t guarantee you make profit on trading these forex pairs. Still, you can either make money on their price fluctuations, or lose. However, they offer good trading conditions, as they are also the most liquid currency pairs with lower spreads.

Short analysis of the 5 top traded currency pairs

EUR/USD

This one is considered the #1 – the world’s most popular and widely-traded currency pair on the forex market. The pair represents the world’s 2 biggest economies – The European Union market and the US. 

The EUR/USD pair enjoys a high daily volume of transactions, which makes it extremely liquid and result in tight spreads. The EUR/USD exchange rate is driven by a range of different factors, including the interest rates set by both the US Federal Reserve and the European Central Bank. 

Nicknamed the “Fiber”, the Euro to US dollar currency pair comprised 23% of all the FX transactions in 2016.

USD/JPY

The USD/JPY currency pair is raked #2 in the list of top-traded currency pairs. Nicknamed the “Ninja” after a popular superheroic character, the US dollar vs Japanese yen pairing assesses the value of the two superpowers' currencies against each other.

The pair traded in extremely high volumes, which ensures low bid-ask spreads and high liquidity. Its extreme volatility attracts numerous investors and traders, who try to catch up with exciting opportunities to benefit from the rising and falling USD/JPY market.

Today, the yen is often used as a reserve currency after the US dollar, the Euro and the British pound. The Japanese currency is subject to the so called active stability intervention. It means that the Japanese government may buy and sell the currency in bulk to keep the JPY exchange rate under control.

five most traded currencies

GBP/USD

The British pound is the 3rd most-traded currency in the world. With a stable monetary policy, an extreme liquidity and an overall standing in the financial world, the Sterling has always been a popular trading choice together with the US dollar as the most traded international currency.

Often referred to as the “Cable”, GBP/USD is one of the most widely-traded currency pairs. It is significantly affected by monetary policy of the two countries, interest rate changes and other notorious political events, driving the pair’s volatility. 

The key players that influence the GBP/USD rate are the respective financial bodies – The Bank of England in Britain and the US Federal Reserve in the USA. 

five most traded currencies

AUD/USD

Also known as the “Aussie”, the Australian dollar to US dollar currency pair is another top FX traders’ choice. The value of Australian dollar is closely tied to the value of its exports, with coal and iron ore accounting for a significant part of Australia’s GDP.

A dropdown of the value of these commodities on the international market may have a strong impact on the value of the AUD, causing its slump. In terms of the AUD/USD pair it means that the American dollar would become stronger. The same way as with other currency pairs, the AUD/USD is also greatly affected by the interest rate differential kept by the Reserve Bank of Australia and the Fed.

five most traded currencies

USD/CHF

Also referred to as the “Swissie”, USD/CHF keeps its place in the list of most-traded forex pairs. Swiss financial system has always been considered a safe haven for investors and their money.

Although this pair is not so actively traded as the rest in the list, the Swiss currency is often turned to in times of increasing market volatility. When the market gets volatile, the price of this pair usually drops as CHF strengthens its position against the USD.

five most traded currencies

Special summer offer: try something exotic

Although it’s already September outside, which means summer is officially over, we always try to make it last longer. For sure, you may trade all the top 5 most-traded stocks all year round, but if you need to find something new and hot you may take a look at some special offers – i.e. exotic currency pairs.

Sometimes you don’t have to go far away to find something exotic. Your local currency may also form an exotic pair, which may suit your investment goals. Very often, it is good to trade a pair that you have all the information about. Local currencies (if they are not included in the majors), may become an interesting alternative, provided that they have enough liquidity, of course. 

The list of most popular exotic pairs you can easily trade with CFDs include: 

To see the full range of currency pairs you can trade with contracts for difference at Capital.com, see out Forex page.

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

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