November 6, 2016

Dominates over 80%! The most traded Forex Currency Pair is…

The Forex Currency Pairs with the Largest Trading Volume in the World.


Do you know what FX traders trade all the time?

Choosing the more liquidated Forex currency pairs is very important for traders.

“Liquidated” means more traded in the market, and that means the Forex currency pair is:

  • Traded with tighter spread
  • Executed smoothly at anytime without re-quotes
  • Lower possibilities of Slippage

But which Forex pairs are traded more by FX traders? You might already have ideas though, of course major currency pairs are the ones which investors trade all the time.

And here is a report of Forex currency pair rankings released by the Financial Futures Association of Japan.

Ranking Forex Currecy Pairs Trading Volume in December, 2014 (Billion JPY)
1 USD/JPY 5,352,742
2 GBP/JPY 269340
3 EUR/JPY 236142
4 AUD/JPY 219083
5 EUR/USD 186987
6 NZD/JPY 44315
7 AUD/USD 38096
8 GBP/USD 21186
9 EUR/AUD 5628
10 CAD/JPY 5318

The above data shows the trading volume of December 2014, calculated by all Japanese OTC Forex brokers’ total.

JPY cross pairs dominate the majority of them, as they were traded mainly in Japan though, the top “USD/JPY” dominates over 80% of the market in Japan.

Precisely, 83.51% is the trading of USD/JPY and other currencies have only 16.49% of the market share.

For your information, the most traded Forex currency in the world is:

EUR/USD, and USD/JPY is the second

according to the data released by BIS(Bank for International Settlements).

Expectations for a rate hike dampen USD Higher than most Currencies ahead of data releases

Difference of Major and Minor Forex pairs

So, EUR/USD and USD/JPY are traded mostly by the traders in the world, but does that mean that you should also trade these currencies?

There are different advantages for trading Major Forex pairs and Minor Forex pairs.

Major Forex currency pairs

Such as USD, EUR, JPY, GBP and AUD are very major Forex currencies.

These currencies are traded often in Forex markets and very liquidated, as in so many investors are now buying and selling them every second.

The advantages are as follows:

  • Traders can benefit from lower spread/commissions.
  • Lower rate of Slippage and Re-quotes
  • Market analysis/reports provided by majority of financial companies are mainly about the major currencies.

Minor Forex currency pairs

Such as MXN, TRY and ZAR are popular minor currencies.

The main advantage of trading such currencies is the high Swap Points.

Swap Points, or overnight financing charge can be positive profit for traders depending on the direction of the trades.

Some traders do “Swap Arbitrage”, and earn swap points everyday without worrying about losing money for the changing market price of the currency.

Minor Forex currencies are not so suited for day-traders, as they normally have wide spread and low liquidity.

Hope this article helps you for your future trading.

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