Forex Currency Pairs
In forex you never buy a currency on its own. You always buy one currency and sell another at the same time. That is why every forex price is a currency pair, such as EUR/USD or USD/JPY.
Base and Quote Currency
A pair has two parts:
- The base currency is the first one. It is the "thing" you are buying or selling. It always counts as 1 unit.
- The quote currency is the second one. The price tells you how much of it you need to buy 1 unit of the base.
Example
EUR/USD = 1.0850: base is EUR, quote is USD. 1 euro = 1.0850 US dollars.
USD/JPY = 150.00: base is USD, quote is JPY. 1 US dollar = 150 Japanese yen.
Buying EUR/USD means you buy euros and sell dollars. Selling EUR/USD means you sell euros and buy dollars.
Note: The order is set by market convention, not by you. You will always see EUR/USD, never USD/EUR, on a trading platform. Pairs are sometimes written without the slash: EURUSD.
Currency Codes (ISO 4217)
Every currency has a three-letter code from the ISO 4217 standard. Usually the first two letters are the country and the third is the currency's name.
| Code | Currency | Country / region | Nickname |
|---|---|---|---|
| USD | US dollar | United States | Greenback, buck |
| EUR | Euro | Eurozone (21 countries) | Fiber (in EUR/USD) |
| JPY | Japanese yen | Japan | Yen |
| GBP | British pound sterling | United Kingdom | Cable (in GBP/USD), quid |
| CHF | Swiss franc | Switzerland | Swissie |
| CAD | Canadian dollar | Canada | Loonie |
| AUD | Australian dollar | Australia | Aussie |
| NZD | New Zealand dollar | New Zealand | Kiwi |
| CNH / CNY | Chinese yuan (offshore / onshore) | China | Redback |
| MXN | Mexican peso | Mexico | Peso |
| ZAR | South African rand | South Africa | Rand |
| SEK / NOK | Swedish / Norwegian krona/krone | Sweden / Norway | Stocky / Nokkie |
The Major Pairs
The majors are the most traded pairs. Each one includes the US dollar, which is on one side of nearly 9 in 10 forex trades. Majors have the most liquidity (buyers and sellers), so they usually have the lowest spreads.
| Pair | Currencies | Nickname | Example price |
|---|---|---|---|
| EUR/USD | Euro / US dollar | Fiber | 1.0850 |
| USD/JPY | US dollar / Japanese yen | Gopher | 150.00 |
| GBP/USD | British pound / US dollar | Cable | 1.2700 |
| USD/CHF | US dollar / Swiss franc | Swissie | 0.8800 |
| AUD/USD | Australian dollar / US dollar | Aussie | 0.6600 |
| USD/CAD | US dollar / Canadian dollar | Loonie | 1.3600 |
| NZD/USD | New Zealand dollar / US dollar | Kiwi | 0.6100 |
Info: GBP/USD is called "cable" because in the 1800s the pound–dollar rate was sent across the Atlantic by an undersea telegraph cable. "Loonie" comes from the loon bird on Canada's one-dollar coin.
Minors and Crosses
A cross (or cross pair) is any pair that does not include the US dollar. Crosses made only of major currencies are often called minors.
| Pair | Nickname | Example price |
|---|---|---|
| EUR/GBP | Chunnel | 0.8545 |
| EUR/JPY | Yuppy | 162.75 |
| GBP/JPY | Guppy / Geppy | 190.50 |
| EUR/CHF | Euro-swissie | 0.9550 |
| AUD/JPY | — | 99.00 |
Example: Where does a cross price come from?
EUR/JPY = EUR/USD × USD/JPY
= 1.0850 × 150.00
= 162.75
The dollar "cancels out". You'll practice this in Reading Quotes.
Warning: Yen crosses like GBP/JPY are known for big daily ranges. They can move 100–200 pips in a day, which is exciting but dangerous for beginners.
Exotic Pairs
An exotic pair combines a major currency with the currency of a smaller or emerging economy, such as USD/TRY (Turkish lira), USD/ZAR (South African rand), USD/MXN (Mexican peso) or EUR/TRY.
Why people trade them
- Big moves and trends
- High interest rates (possible positive swap)
Why beginners should wait
- Spreads can be 10–50× wider than on majors
- Thin liquidity, sudden gaps, political risk
- Lower leverage allowed by regulators
Commodity Currencies
Some currencies tend to follow the price of what their country exports. These are called commodity currencies, or "commodity dollars".
| Currency | Linked commodity | Main pair |
|---|---|---|
| AUD (Aussie) | Iron ore, coal, gold; demand from China | AUD/USD |
| CAD (Loonie) | Crude oil | USD/CAD |
| NZD (Kiwi) | Dairy and farm exports | NZD/USD |
| NOK | Crude oil, natural gas | USD/NOK |
Example: Oil and the loonie
If oil prices rise, Canada earns more from exports and the CAD often strengthens. Because CAD is the quote currency in USD/CAD, a stronger CAD makes USD/CAD fall, for example from 1.3600 to 1.3500.
Note: These links are tendencies, not rules. Interest rates and risk mood can override them. See Correlations.
Which Pairs Should You Start With?
As a beginner, keep it simple. Pick one or two major pairs and learn how they behave.
- EUR/USD: the most traded pair, very low spreads, lots of free analysis.
- GBP/USD: liquid, moves a bit more than EUR/USD.
- USD/JPY: liquid, very sensitive to US and Japanese interest rates.
- AUD/USD: a good first look at a commodity currency.
Tip: Watching 20 pairs means knowing none of them well. Learn the "personality" of a few: when they move most, how far they travel in a day, and which news affects them. Trading hours matter too: see Trading Sessions.
Test Yourself With Exercises
In GBP/USD, which currency is the base?
- GBP
- USD
- Neither: both count equally
Which pair is nicknamed "cable"?
- EUR/USD
- USD/CAD
- GBP/USD
- NZD/USD
Which of these is a cross pair (no US dollar)?
- USD/CHF
- EUR/GBP
- AUD/USD
EUR/USD = 1.0800 and USD/JPY = 150.00. What is EUR/JPY?
- 138.89
- 162.00
- 151.08
- 148.92
Oil prices jump. What is the most likely first reaction in USD/CAD?
- It rises, because the USD strengthens
- Nothing: oil has no link to CAD
- It rises, because CAD weakens
- It falls, because CAD tends to strengthen with oil