A currency pair is the quotation of two separate currencies and is used as a financial instrument to buy or sell the currencies in exchange for the other. A currency pair is always presented with a base currency on the left and a quote currency on the right.
Currency Pair CategoriesDepending on its part in active trading and at times, the countries the currency originates from, currency pairs can come in various categories.
- Major Currency Pairs: Primarily, these pairs are those that involve the U.S. Dollar. These pairs are much more popular with highly traded volumes as they are considered as ‘safe haven’ assets.
- Minor or Cross Currency Pairs: Primarily, these pairs are those that do not involve the U.S. Dollar. These are usually local-based and are not as popular as major currency pairs.
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