Currencies traded in the Forex market

Trading in the Forex Market: Understanding Currency Pairs

Trading in the Forex market operates on a system of currency pairs. For example, if you decide to buy 1,000 euros, you will pay another currency to obtain the euros. If that currency is the US dollar, you will have conducted a trade on the Euro/US Dollar (EUR/USD) pair.

Forex trading involves buying one currency and selling another simultaneously.

Major Currencies: USD, EUR, JPY, GBP, CHF
Minor Currencies: Notable examples include AUD, CAD, NZD

A currency pair is divided into two parts: the base currency and the quote currency. The exchange rate of the pair indicates how much of the quote currency is required to obtain one unit of the base currency.

This lesson explains the currencies traded in the Forex market and how they are named.