Forex trading is always done with pairs that lead to the creation of the term forex currency pairs. Given a large number of currencies in the world, can you imagine how many types of pairs were created? Fortunately, not all familiar currency pairs are traded on the forex market.

In order to make it easier to mention the types, market participants then divide the it into 3 main types; major, cross, and exotic. This is usually explained in the best forex broker that you use.

Major Forex Currency Pairs

It is refered to the most traded currency pairs. Because the value is compared to the USD, these pairs are the types that have the highest liquidity. Therefore, it is not surprising that most of the trading volume on the forex market is occupied by the major ones. Overall, here are the major pairs in forex:

1. EUR / USD: Euro (in Eurozone countries) versus US Dollar
2. GBP / USD: Pound Sterling (UK) versus US Dollar
3. USD / JPY: US Dollar versus Yen (Japan)
4. AUD / USD: Australian Dollar versus US Dollar
5. NZD / USD: New Zealand Dollar versus US Dollar

Seeing the variation in the pair above, you might be wondering why the USD position is never consistent; sometimes in front but sometimes behind? For information, the mention of forex currency pairs follows the principles where the primary currency is the bottom currency, while the second acts because the quote currency.

Base Currency is the benchmark on which the quote currency exchange rate is based. So for example EUR / USD is worth 1.3000, it means that every 1 Euro is equal to 1.3000 USD. If USD / JPY is worth 130.24, then to buy 1 USD you need to pay 130.24 Japanese Yen.

This naturally results in a currency with a higher value positioned as the base. But lately, this has not become a mandatory rule as some pairs have exceeded the parity value. A general example can be taken from AUD / USD, which is currently moving in a range of 0.8.

Cross Currency Pairs

The types of forex currency pairs are not much different from the major currency pairs. However, they are not paired with USD because they are paired with each other. Current currency pairs, which are also referred to as minor ones, are still quite widely traded, but not as mainstream as major pairs. Some examples of Pair Cross are as follows:

1. EUR / GBP: Euro versus British Pound
2. EUR / JPY: Euro versus Japanese Yen
3. EUR / CHF: Euro versus Swiss Franc
4. EUR / CAD: Euro versus Canadian Dollar
5. GBP / JPY, and so on.

Exotic Currency Pairs

This pair is currency pairs involving currencies from countries outside the UK, Eurozone, Japan, Switzerland, Canada, Australia, and New Zealand. Often, exotic forex currency pairs consist of the currencies of developing countries, originating from the regions of Asia, Latin America, and Africa.

As the name implies, this is rarely traded on the forex market. This is due to the high volatility and wide spreads. The following is an example of an Exotic Currency Pair in the forex market:

1. USD / SGD: US Dollar versus Singapore Dollar
2. USD / HKD: US Dollar versus Hong Kong Dollar
3. USD / CNY: US Dollar versus Chinese Yuan
4. EUR / TRY: Euro versus Turkish Lira
5. USD / SEK: US Dollar versus Swedish Krona, and many more.

Being a trader must also consider a trusted forex broker. One forex broker you can trust is Didimax forex broker. Basically, everyone must have their own considerations in choosing a currency pair.

However, in general, they always pair their choice of currency with strong major currencies such as USD or EUR. For beginners, the Euro vs USD or GBP vs USD pairs are quite a good forex currency pairs.