In theory, there are around 11,781 currency pairs that you can trade in the forex market. Although, only around 70 pairs are used by forex traders.
But if you’re looking for only one forex asset to trade, that 70 is still a lot for you to consider. Don’t worry, you don’t have to trade all these just to figure which one works best for you.
Discover here which of the 70 are the most traded currency pairs in 2024. If you think this list would all be just major currency pairs, you might want to continue reading.
What Makes a Currency Pair Heavily Traded?
There are 180 legally recognized currencies in the world. When combined, it would create around 11,781 currency pairs. However, that’s just theoretical because, in practice, forex traders often trade only around 70 pairs and broker only offer around 140 out of the in-theory number of currency pairs.
Well, 70 and 140 are still a lot to consider! Here goes the question of “How can you spot a profitable pair to trade?”
You have to consider these six factors:
- High liquidity: When a currency pair is liquid, a trader not only has an smooth time entering or exiting a position but they experience favorable prices because of high volume of trades.
- Tight spread: Transaction spreads represent the fees traders pay to open and exit a position. A tight spread, compared to a high spread, mean a little less expensive forex trading.
- Volatility: A volatile market means that the market price jumps or fluctuates, which present profitable opportunities for traders. However, remember that a volatile market also poses risks especially if a trading account doesn’t have enough safety cushion.
- Trendiness: Currency pairs that have proven to exhibit clear trends over time are ideal for traders because of its predictivity, which boosts profitability.
- Trading Session: The forex market operates 24/5, but liquidity and volatility vary during different trading session. Trading pairs that aligns with the most active sessions can provide better trading opportunities due to increased market participation and trendiness.
- Risk Appetite: Your personal risk tolerance should always be considered when choosing which currency pair to trade. Some forex assets may have increased profitable opportunities but comes with greater risks.
But does this mean you must undergo meticulous monitoring, analysis, and research? You can if you want. There’s an easier way to do it.
Joining a trading community opens you to first-hand experiences. These knowledge comes with the most practical, genuine, and profitable insights about the market. After all, everything you’ll get are from traders themselves.
With the best community for traders, you are connected to thousands of online traders worldwide, and you’re up for the opportunity to learn from the members’ experiences—whether that be their trading strategies, experience with any broker, or even the factors they consider when choosing which currency pair or financial security to trade.
Let’s jump to the seven most traded currency pairs in 2024. See if any of these forex pairs fit your trading objectives and financial goals.
The Top 7 Most Traded Currency Pairs for 2024
Are you looking for other currency pairs to trade for portfolio diversification? Or maybe you’re simply curious about the hot forex assets in the market right now.
Nevertheless, you’re obviously excited about exploring the most traded currency pairs this year.
Euro/US dollar (EUR/USD)
EUR/USD has been the most traded currency for over a decade. This traders’ preference for EUR/USD is due to the European Union (EU) and the United States (US) economic strength.
According to the latest data released by the Bank for International Settlement (BIS) in 2022, the EUR/USD pair has a 22.7% overall forex market share. While this decreased from 2019’s 24.0% and 2013’s 24.1%, the currency pair remains the most traded currency in forex. Moreover, this tells you that retail traders are now becoming more diverse and flexible with their trading portfolios.
To effectively trade EUR/USD, you can monitor the USD/CHF market because of the negative correlation between the two forex markets. Also, always be on the lookout for the news and data releases of the European Central Bank (ECB) and the US Federal Reserve (Fed). All crucial economic decisions from these central banks are extremely significant to the future direction of EUR/USD and even to most currency pair markets.
US dollar/Japanese yen (USD/JPY)
The Japanese economy is among the strongest in the world, solidifying the Japanese yen’s relevance to the global financial market. That, coupled with the safe-haven status of the US dollar, made USD/JPY the second most traded currency pair in the forex market.
Supported by its huge daily market volume, its highly volatile nature makes the USD/JPY market known for its tight spread. Again, a tight spread means a trader is paying less compared to when they’re trading a currency pair with a high spread. This makes the JPY/USD so well-loved by day traders and scalpers.
The latest data from the BIS suggest an increase in USD/JPY’s forex market share. From 13.2% in 2019, it increased by 0.03% in 2022, to 13.5%.
Here, the counterpart of the US Fed is the Bank of Japan (BoJ), which plays a crucial role in monitoring, setting, and managing the yen’s interest rates. The BoJ’s policies and decisions can significantly influence the USD/JPY exchange rate, making it essential for traders to keep a close watch on their announcements and economic reports.
British pound/US dollar (GBP/USD)
We already know that the US dollar is among the strongest currencies in the world. But what about the British pound (GBP)?
Well, GBP is the fourth strongest currency in the world, after the USD, EUR, and JPY.
FUN FACT: GBP used to be stronger than most currencies, including the USD! In fact, in 2007, its value was twice as high as USD.
Now, let’s look at GBP/USD. Given that both currencies are among the strongest in the world, GBP/USD is undoubtedly on this list.
In 2022, the BIS recorded a 9.5% share of GBP/USD in the forex market.
But what really makes GBP/USD heavily traded in the forex market? Aside from its liquidity and tight spread, trading this currency pair is also known as an opportunity for profitable pips and large jumps. This is mainly due to the volatile nature of this market.
US dollar/Chinese renminbi (USD/CNY)
Here’s an interesting pair! Despite not being in the group of major currency pairs, the US dollar and Chinese renminbi (USD/CNY) pair is ranked fourth among the most traded forex pairs in the world.
According to the BIS, this pair jumped the most in terms of market share. The bank recorded an increase of 2.5% from 2019’s 4.1% to 2022’s 6.6%. This significant increase made USD/CNY overtake the majors like USD/CAD and AUD/CAD.
The interesting trade relationship between the US and China makes this currency pair heavily traded by forex traders. This makes the USD/CNY highly volatile, thus presenting profitable opportunities for currency pair investors.
Hence, if you want to trade this currency pair, you should always be aware of how the two governments act toward one another. It could significantly affect the exchange rate of the pair.
US dollar/Canadian dollar (USD/CAD)
The USD/CAD currency pair is the fifth most traded in the forex market, with a market share of 5.5%.
Aside from its profitable opportunities, the main reason why USD/CAD is among the heavily traded currency pairs in the world is due to its correlation with the commodity market.
The Canadian dollar and its economy are known to move due to its oil exports. So you can monitor the commodity market, especially crude oil, to trade in USD/CAD. Remember, the price of oil greatly impacts the value of the CAD.
Rule of thumb: If the price of oil increases, CAD tends to strengthen against the USD. Also, always keep in mind the changing relationship between the US dollar and the oil.
Australian dollar/US dollar (AUD/USD)
The AUD/USD pair is the sixth most traded currency pair on the list. Currently, it has a market share of 5.1% in the forex market, down from its previous 5.4%.
Like the USD/CAD, the value of AUD/USD is highly correlated to the commodity market. That is mainly because the Australian economy is significantly reliant on commodity exports. So again, you must also monitor the commodity market to gauge the potential market direction of AUD/USD.
This includes monitoring the prices of these commodities that are crucial to the Australian economy:
- Iron Ore
- Coil
- Natural Gas
US dollar/Swiss franc (USD/CHF)
Both the USD and Swiss franc (CHF) are safe-haven currencies. Forex traders mainly trade the USD/CHF pair to protect their investments during market turbulence and economic instability.
With the stability of the Swiss and US financial systems, the currency pair ranked 7th as the most traded currency pair in the financial market. Its forex market share has increased by 0.5% from 2019 (3.4%) to the latest data in 2022 (3.9%).
Here’s the tip: when you trade this currency pair, you should always consider the stability of other major currencies. Due to CHF’s safe-haven status, it tends to weaken against the USD when other economies are experiencing stability or appreciation.
Frequently Asked Questions
Is the USD the most traded currency?
Yes, the US dollar is the most traded currency in forex. According to the Bank for International Settlement (BIS), USD comprised 88.5% of forex trades in 2022, the highest among all the data released within the decade (2013:87%, 2019:88.3%).
What are the other traded currency pairs in the world?
Here are the other traded currency pairs with significant forex market shares:
- USD/Hongkong dollar (USD/HKD): 2.4%
- USD/Singaporean dollar (USD/SGD): 2.3%
- USD/South Korean won (USD/KRW): 1.7%
- USD/Indian Rupee (USD/IRN): 1.6%
- USD/Mexican peso (USD/MXN): 1.4%
Wrapping Up: Which Among These 7 Currency Pairs Should You Trade?
When choosing which of these seven most traded currency pairs to invest in, it’s essential always to assess your trading objectives, risk appetite, and financial goals. Currency pairs are not created equal. They don’t share the same risk exposure and profitable opportunities. So, always consider your own trading capacity when choosing a forex asset to trade.