Major Currency Pairs

Currencies in the forex market come into pairs and are connected with a particular exchange rate. The major pairs include the following:

• EUR/USD

  In this pair the Euro represents the base currency, whereas the counter currency is the US dollar. Thus, if expectations point to deterioration in the European market, then this pair should be sold. This should be done since the falling in the European market leads to the conclusion that the value of the US dollar will increase as compared to the value of the Euro.

• GBP/USD

  In this pair the British pound represents the base currency, whereas the counter currency is the US dollar. Thus, if expectations are focused on the weakening of the pound, then the pair should be sold. This is required if the value of the pound falls relative to the value of the US dollar. This action should be considered especially in the case of anticipated adoption of the euro by British. The opposite is true if the conditions of the British economy are about to strengthen, which will call for the purchase of the pair. 

• USD/JPY

  In this pair the US dollar represents the base currency, whereas the yen is the quote currency. Thus, if your expectations point to the increase in the value of the US dollar as compared to the value of the yen, then you should buy the pair. However, if the reverse is true, then the selling of the pair should be considered.

• USD/CHF

  In this pair the US dollar represents the base currency, whereas the Swiss franc is the quote currency. Thus, buying the pair should be considered in the case of increasing value of the US dollar as compared to an overvalued franc. However, if you expect that various events will have a negative effect on the value of the US dollar, the selling of the pair should be considered.

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