Major currencies in Forex
In the Forex market Majors are the most traded currency pairs with the highest trading volume. These pairs are Eur/Usd (Euro/Dollar), Gbp/Usd (Pound/Dollar), Usd/Jpy (Dollar/Yen) and Usd/Chf (Dollar/Swiss Franc).
The dollar It is the most traded currency in Forex market transactions and is well above the rest, since 86% of transactions are carried out with it about. For this reason, macroeconomic news such as interest rates, IPC, etc., in the US are the ones that have the most impact on the Forex market. The Euro and the Yen follow with 37% and 16.5% respectively, while the British Pound and the Swiss Franc are used in approximately 15% and 7% of transactions. These are the currencies that make up the Forex Majors.
How to read Forex quotes
Currencies trade in pairs. Therefore, the value of one is reflected against that of the other. The base currency appears to the left of the pair and the quote currency to the right. An example:
In this case, the British pound is the base currency and the Japanese yen is the quote currency. So: £1 = ¥149.50.
Exotic Currency Pairs
The most exotic currency pairs are made up of a main currency and the currency of an emerging or strong economy, although smaller from a global perspective, such as Hong Kong or Singapore and European countries outside the eurozone.
These pairs are not traded as much as the majors or minors, so the cost of trading them is often higher due to the illiquidity of these markets. That is, as there is less liquidity in these currency pairs, the spread is usually higher.