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What are Currency Pairs?


Njau

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Currency pairs are specific currencies from two countries that are coupled for trading on the foreign exchange market place. These currencies can be traded because they each have identified exchange rates upon which the trades create a position basis. 

 

Almost all national currencies can be coupled and traded in the foreign exchange market. There are, however, certain currencies that are paired more frequently than others. 

 

 The Eurodollar is the most widely traded pairing though there are other common currencies pairs such as the US Dollar against Great Britain Pounds (USD/GBP), the US Dollar against the Japanese Yen (USD/JPY), the US dollar Against the Canadian Dollar (USD/CAD), the US Dollar against the Australian Dollar (AUD/USD), the US dollar Against the New Zealand (Dollar NZD/USD).

 

It is also important to know that there are currencies pairs that do not trade against the US dollars. These are referred to as the Cross currency pairs. The most common cross currency pair often involves the Japanese Yen and the Euro. 

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