The forex market with hundreds of currency pairs can be overwhelming when you first start. So, what are the best forex currency pairs to trade? In this article, Tipstrade.org will share the key factors to consider when choosing the best forex currency pairs, as well as specific suggestions for currency pairs to trade. Let’s explore!
What are forex currency pairs?
In forex, trades are conducted through currency pairs from two countries. In simple terms, a currency pair is the exchange rate between two different currencies. Each currency pair has a specific exchange rate, which serves as the basis for trading. This means that you are always trading with a currency pair – buying one currency and simultaneously selling the other currency. For example, with the EUR/USD pair, you are buying the Euro and selling the US Dollar.
>>See more:
- What is Forex? The Complete Guide for Beginners
- What is Pip in Forex? Accurate calculation guide for traders
- What are exchange rates? How to read and analyze rates in Forex
How to read currency pairs
Understanding how to read currency pairs is the first step to effective forex trading. Each forex currency pair reflects the exchange rate between two currencies. Having a clear understanding of how to read currency pairs in forex helps you determine the correct trading direction – whether to buy or sell.
In a currency pair, there are always two currencies:
- Base Currency: This is the currency that appears first in the currency pair. It is the currency you are buying or selling first in trading.
- Quote Currency: This is the currency that appears second in the currency pair. It indicates how many units of this currency are needed to buy one unit of the base currency.
For example: The currency pair EUR/USD = 1.25000 means that 1 Euro (EUR) is worth 1.25 US Dollars (USD).
Detailed reading:
⇒ EUR is the base currency.
⇒ USD is the quoted currency.
📌When you buy the currency pair EUR/USD, it means you expect the EUR to appreciate against the USD. Conversely, when you sell this pair, you expect the EUR to depreciate against the USD.
Types of currency pairs
When participating in forex trading, you need to understand the different types of currency pairs. This is an important factor in building an appropriate strategy and effectively managing risk. In the forex market, currency pairs are divided into 3 main groups: Majors, Crosses, and Exotics. In addition, there are some new currency groups that are attracting the interest of many traders. All of these groups will be introduced in detail shortly:
Major pairs
Major currency pairs are the most popular, accounting for the majority of trading volume in the Forex market (approximately 80%). A notable feature of this group is the constant presence of the US Dollar (USD) – the global reserve currency – combined with other strong currencies from major economies.
Below is a summary table of the major currency pairs in the forex market:
| Major Forex Currency Pair | Currency Name |
| EUR/USD | Euro / US Dollar |
| USD/JPY | US Dollar / Japanese Yen |
| GBP/USD | British Pound / US Dollar |
| USD/CHF | US Dollar / Swiss Franc |
| AUD/USD | Australian Dollar / US Dollar |
| USD/CAD | US Dollar / Canadian Dollar |
| NZD/USD | New Zealand Dollar / US Dollar |
Cross pairs
Cross currency pairs are currency pairs that do not include USD, typically consisting of strong currencies such as EUR, JPY, GBP, AUD… This group appears to meet the demand for direct trading between currencies without the need to convert through USD.
Below is a list of the popular cross currency pairs in the forex market:
| Cross Forex Currency Pair | Currency Name |
| EUR/GBP | Euro / British Pound |
| EUR/JPY | Euro / Japanese Yen |
| GBP/JPY | British Pound / Japanese Yen |
| AUD/JPY | Australian Dollar / Japanese Yen |
| CHF/JPY | Swiss Franc / Japanese Yen |
| EUR/AUD | Euro / Australian Dollar |
Characteristics of cross currency pairs:
- More volatile than major currency pairs.
- Spreads are usually higher.
- Suitable for experienced traders who enjoy speculation.
Exotic pairs
Exotic currency pairs are a combination of a major currency (such as USD, EUR) and a currency from developing or smaller economies (such as VND, TRY, ZAR…).
Below is a list of the top exotic currency pairs in the forex market:
| Exotic Forex Currency Pair | Currency Name |
| USD/TRY | US Dollar / Turkish Lira |
| USD/THB | US Dollar / Thai Baht |
| EUR/TRY | Euro / Turkish Lira |
| USD/ZAR | US Dollar / South African Rand |
| USD/MXN | US Dollar / Mexican Peso |
| USD/DKK | US Dollar / Danish Krone |
| USD/NOK | US Dollar / Norwegian Krone |
Characteristics of exotic currency pairs:
- Low liquidity, difficult to trade.
- High spread, large transaction costs.
- Extremely volatile, high risk but with great profit potential.
This group is often chosen by professional traders to capitalize on short-term high volatility.
How to choose the best forex currency pairs
The best forex currency pairs to trade usually depend on your trading strategy, but generally, the most popular forex currency pairs are those that have liquidity, volatility, and a significant trading volume at the times of day you wish to trade. Here are some ideas you can consider:
Liquidity
The forex market is known for its high liquidity, meaning trades can be executed quickly and efficiently. However, not all currencies have the same level of liquidity.
Major currency pairs account for up to 75% of forex trading volume, making them easier to trade than cross and exotic currency pairs because there are more buyers and sellers. It’s no surprise that all these pairs include the US dollar – thanks to the massive size of the American economy.
The higher the liquidity, the narrower the spread, which means the underlying market price doesn’t need to move too much for your trade to be profitable.
Under normal market conditions, the spread between the bid and ask prices for major and liquid cross currency pairs typically ranges from 1 to 5 points. But when liquidity is low, this spread can widen, and you’ll need more capital to cover trading costs.
Volatility
Different currency pairs will have different rates of exchange change – often referred to as volatility. This will affect your trading decisions, as it could increase the risk.
Traders interested in holding long-term positions might choose less volatile currency pairs, while short-term speculators might be content with “scalping,” making small profits from rapid price fluctuations within the day.
Fluctuations in the forex market are measured in pips, which are the last decimal digit in a currency’s exchange rate. Therefore, short-term traders often look for currency pairs with the largest pip value.
Time of day
Different currency pairs will be suitable for trading at different times of the day. Why? Because the time of day strongly affects market liquidity and the potential for price volatility.
| Pair | Tokyo | London | New York |
| EUR/USD | 76 | 114 | 92 |
| GBP/USD | 92 | 127 | 99 |
| USD/JPY | 51 | 66 | 59 |
| AUD/USD | 77 | 83 | 81 |
| NZD/USD | 62 | 72 | 70 |
| USD/CAD | 57 | 96 | 96 |
| USD/CHF | 67 | 102 | 83 |
| EUR/JPY | 102 | 129 | 107 |
| GBP/JPY | 118 | 151 | 132 |
| AUD/JPY | 98 | 107 | 103 |
| EUR/GBP | 78 | 61 | 47 |
| EUR/CHF | 79 | 109 | 84 |
When considering the average pip volatility of major currency pairs during each forex trading session, it can be seen that the London session – which runs from 8:00 AM to 4:00 PM GMT – is the most volatile.
As a general rule, a currency pair will have the highest liquidity and price volatility when the two trading sessions overlap. For example, if you’re trading the EUR/JPY pair, the best time is when both the New York and Sydney sessions are open – that is, from 8:00 to 9:00 (GMT).
Top 10 best forex currency pairs to trade in 2025
According to the most recent Triennial Survey by the Bank for International Settlements (BIS) in 2019, the best forex currency pairs to trade include:
EUR/USD
EUR/USD – also known as the ‘fibre’ – is considered the most popular currency pair in forex because it typically has the highest trading volume and some of the lowest spreads. It’s no surprise that this currency pair is popular, as it’s the best way to invest in the world’s two largest economies – the United States and the Eurozone.
The EUR/USD pair is primarily influenced by political developments affecting the dollar, the euro, and their relationship to one another. For example, if the US Federal Reserve (the Fed) intervenes in market operations to strengthen the dollar, you can expect the dollar to appreciate against the euro and the value of the EUR/USD pair to decrease.
EUR/USD is also a popular trading option for beginners because there is usually a lot of information about this pair shared online.
| Currency pair | Min spread | Margin | % of daily trade volume |
| EUR/USD | 0.0000514 points | 1% | 24% |
USD/JPY
USD/JPY is often associated with low spreads and more predictable price volatility compared to many other currency pairs.
Despite the yen’s daily price fluctuations, the Bank of Japan frequently buys and sells the currency to control exchange rates and maintain a competitive export market.
That’s why people often say the yen is in a “dirty float” mechanism – meaning it’s a floating currency but not entirely in the true sense. Therefore, trading USD/JPY is a way to capitalize on these regular fluctuations – as long as you can buy and sell at the right times.
USD/JPY (also known as the gopher) has also become a popular way to trade based on the relationship – or rather, the tensions – between the United States and Asian regions, as competition increases in sectors like technology and e-commerce.
| Currency pair | Min spread | Margin | % of daily trade volume |
| USD/JPY | 0.00548 points | 1% | 13.2% |
GBP/USD
GBP/USD – known as the “cable” – has long been a popular currency pair, but due to numerous economic and political events in the UK, the volume of traders wanting to speculate on the British economy has increased significantly, including the 2008 financial crisis and the UK’s decision to leave the EU.
More recently, in September 2022, traders rushed into GBP/USD as the UK government and the Bank of England attempted to control inflation, causing the pound to fall to its lowest level since 1985.
This currency pair is almost always categorized as highly volatile, and large price swings have significantly contributed to the popularity of GBP/USD. However, remember that high volatility means higher risk, so setting stop-loss and limit orders is crucial to protect your trades.
| Currency pair | Min spread | Margin | % of daily trade volume |
| GBP/USD | 0.00006 points | 1% | 9.6% |
AUD/USD
AUD/USD – commonly known as the “Aussie” – accounts for 5.4% of daily forex trading volume. This currency pair is favored by many traders because the value of the AUD is closely correlated with commodities, providing forex traders with an opportunity to access the market without directly trading futures contracts.
This is because Australia remains one of the world’s leading exporters of coal and iron ore. When commodity prices fall, the Australian economy will be affected and the value of the Australian dollar will decrease accordingly. From then on, the price of the AUD/USD pair will also decrease – because less US dollars are needed to buy one Australian dollar.
If you’re interested in holding AUD, you should closely monitor the prices of key commodities for the Australian economy, as well as announcements from the Reserve Bank of Australia (RBA) or the US Federal Reserve (Fed).
| Currency pair | Min spread | Margin | % of daily trade volume |
| AUD/USD | 0.000022 points | 5.4% | 9.6% |
USD/CAD
The US dollar and the Canadian dollar are closely correlated, as the two countries are financial neighbors and important trading partners.
However, the value of the Canadian dollar is also closely linked to commodity prices, particularly oil prices, as the Canadian economy is heavily reliant on oil exports. Therefore, monitoring oil prices is very important to determine the ideal time to buy if you want to exchange USD for CAD.
It’s also worth noting that because oil is priced in US dollars, if oil prices rise, the value of the Canadian dollar is likely to strengthen against the US dollar. There are two main reasons for this. First, the US dollar often weakens when oil prices rise, as more USD is converted into other currencies to buy oil. Second, Canada will earn USD through its oil exports.
| Currency pair | Min spread | Margin | % of daily trade volume |
| USD/CAD | 0.00009 points | 1% | 4.4% |
USD/CNY
This currency pair is made up of the US dollar and the Chinese yuan (or renminbi). It tells us the exchange rate between the world’s two largest economies, which are also the two largest exporting countries.
Historically, the value of the renminbi has often been lower than that of the US dollar because the Chinese government has intentionally devalued it to keep its exports competitive in the global market.
Recently, the top factor to watch when trading the USD/CNY pair has been US-China tensions, which have escalated for various reasons over the past few years. For example, in August 2022, US House Speaker Nancy Pelosi visited Taiwan, causing Beijing to suspend US-China climate talks and cut off high-level military communication channels.
CNY is the forex code for the Chinese renminbi trading market, but when the renminbi is traded abroad, it is called CNH – so on trading platforms, this currency pair is listed as USD/CNH. The CNH is generally not as tightly controlled by the Chinese government as the CNY, which means it can be more volatile.
| Currency pair | Min spread | Margin | % of daily trade volume |
| USD/CNH | 0.000078 points | 1% | 4.1% |
USD/CHF
USD/CHF is a currency pair consisting of the US dollar against the Swiss franc (CHF) – the official currency of Switzerland.
For the most part, this currency pair is used by traders and investors when they want to protect their assets during periods of market volatility and economic downturn. The Swiss franc is considered a “safe haven” currency due to the stability of the Swiss financial system, meaning it will appreciate in value when other currencies depreciate.
However, this also means that during periods of economic stability, the CHF will often weaken in value as other currencies appreciate.
| Currency pair | Min spread | Margin | % of daily trade volume |
| USD/CHF | 0.000015 points | 1% | 3.6 % |
USD/HKD
USD/HKD is the currency pair between the Hong Kong dollar and the US dollar. Although technically still considered an exotic currency pair – being the US dollar against a non-major economy – the trading volume of this pair doubled between 2016 and 2019. According to a BIS survey, it currently accounts for 3.3% of daily trading volume.
The value of the Hong Kong dollar is effectively pegged to the US dollar thru a mechanism called the “linked exchange rate”. This means that the HKD is only allowed to fluctuate against the USD within a certain range, from 7.75 to 7.85.
Although this system makes USD/HKD less volatile compared to other currency pairs, it is still very popular among swing traders.
| Currency pair | Min spread | Margin | % of daily trade volume |
| USD/HKD | 0.0013 points | 1% | 3.3% |
EUR/GBP
Although EUR/GBP is the exchange rate between two major economies – the Eurozone and the United Kingdom – it is still considered a cross currency pair because it does not include the US dollar.
This currency pair is perhaps one of the most difficult to predict, due to the close but uncertain relationship between the two economies. The pre-Brexit period caused significant volatility in the EUR/GBP exchange rate, and as the UK enters a deeper recession than the Eurozone, the pound is likely to suffer more losses than the euro.
To trade EUR/GBP, it’s important to closely monitor the ongoing political and economic relationship between the UK and the EU, as well as the interest rates set by the Bank of England and the European Central Bank.
| Currency pair | Min spread | Margin | % of daily trade volume |
| AUD/USD | 0.0000844 points | 1% | 2.0% |
USD/KRW
USD/KRW – the exchange rate between the US dollar and the South Korean won – accounted for 1.9% of total daily trading as of 2019. This is also the first year this currency pair has made it into the top ten currency pairs.
As of 2022, the won remains near its lowest level since 2009 due to rising interest rates, concerns about a global recession, and weakening export demand.
The South Korean economy is heavily reliant on international trade and is actually among the top 10 largest exporting and importing countries in the world. This means that the growing trade deficit will put significant pressure on the won. This deficit is expected to reach approximately $50 billion in 2022, due to soaring energy and other commodity costs – marking South Korea’s largest trade deficit since 1964.
Conclusion
There is no currency pair that is absolutely the “best.” Make decisions based on your trading style, the correlation between currency pairs, and market conditions. Most importantly, avoid common mistakes by testing on a demo before trading with real money. Wishing all traders successful trading!