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Chapter 1, Part III. How are currencies traded in the FOREX market? Page 3

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 14, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
    Likes Received:
    Commander in Pips:
    1. All major pairs include the US Dollar with another “Major currency”. These have a leading share in total turnover on the FOREX market. Here they are:

      Pair Countries
      EUR/USD Euro zone / United States
      GBP/USD United Kingdom / United States
      USD/CHF United States/ Switzerland
      USD/JPY United States / Japan
      USD/CAD United States / Canada
      AUD/USD Australia / United States
      NZD/USD New Zealand / United States
    2. Crosses are other combinations of “Major Currencies”. They include one major currency with another, but not with the US Dollar. You can construct them by yourself. I’ll just give you some examples. Euro crosses:

      Pair Countries
      EUR/GBP Euro zone / United States
      EUR/CHF Euro zone / Switzerland
      EUR/CAD Euro zone / Canada
      EUR/AUD Euro zone / Australia
      EUR/NZD Euro zone / New Zealand

      or Japanese Yen crosses:
    EUR/JPY Euro zone / Japan
    GBP/JPY United Kingdom / Japan
    CHF/JPY Switzerland / Japan
    USD/JPY United States / Japan
    CAD/JPY Canada / Japan
    AUD/JPY Australia / Japan
    NZD/JPY New Zealand / Japan
    Pipruit: Ok, Ok, I think I understand that.

    Pipruit: And what are exotic pairs?​
    Commander in Pips: During recent times, the economies of emerging markets have becomes stronger, the trading turnover is rising, so on FOREX markets, there is more demand appeared for exchanging emerging market’s currencies as between themselves and with major currencies. For example, now we can trade on FOREX such currencies as Brazilian real, South Africa’s rand, Mexican peso, Thai baht, Russian Ruble, Singaporean dollar, Chinese Yuan, etc. Usually they are traded to US Dollar and sometimes with other major currencies. Occasionally, they are traded with each other. There is much will depend from your FOREX broker, because not all of them provide the possibility to trade exotic pairs or even their crosses. But, in general, these pairs exist and can be traded. Here are some examples of them:

    Pair Countries
    USD/HKD United States (dollar)/ Hong Kong (dollar)
    USD/SGD United States (dollar) / Singapore (dollar)
    USD/ZAR United States (dollar) / South Africa (rand)
    USD/THB United States (dollar) / Thailand (baht)
    USD/MXN United States (dollar) / Mexico (peso)
    USD/DKK United States (dollar) / Denmark (Krone)
    USD/SEK United States (dollar) / Sweden (Kronor)
    USD/NOK United States (dollar) / Norway (Krone)
    Due to lower size on economies of Emerging markets and their international Trade turnover, the trading volumes with exotic pairs is lower compared to majors and crosses. Besides, the transaction cost for trading them is usually higher.
    #1 Sive Morten, Dec 14, 2013
    Lasted edited by : Feb 1, 2016
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