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If you’re new to Forex trading and want to know which currency pairs are good for trading in 2023, you’re in the right place! Traders Union (TU) experts have created a list of the best Forex pairs for beginners. They’ll explain what makes a currency pair good for trading, so you can start your Forex journey on the right path. Whether you want stability, liquidity, or volatility, the experts will guide you to the best Forex pairs to trade.
Currency pairs
TU’s analysts consider that understanding currency pairs is crucial for anyone new to Forex. These pairs, also called trading pairs, are used to exchange one country’s money for another. Each pair has two assets: the base currency and the quote currency. For example, in EUR/USD, the euro (EUR) is the base, and the U.S. dollar (USD) is the quote. The exchange rate informs you of the amount of the quoted currency required to purchase a single unit of the base currency. Currency pairs are always traded in pairs because one currency’s value depends on another.
Currency pairs categories
Currency pairs in the Forex market fall into three main categories: major pairs, crosses, and exotic pairs. According to analysts at Traders Union, you should be aware of the following information:
- Major currency pairs:
These are the most traded pairs, always including the U.S. dollar.
Examples include EUR/USD, USD/JPY, and GBP/USD.
Traders like them for high liquidity and tight spreads.
They reflect the strength of the U.S. dollar and react to global events.
- Cross currency pairs:
Also known as minor pairs, they don’t involve the U.S. dollar.
Examples are EUR/GBP and GBP/JPY.
Traders use them to speculate on major currency relationships.
While spreads can be wider, they offer trading opportunities based on regional insights.
- Exotic currency pairs:
These pairs mix major currencies with emerging or thinly traded currencies.
Examples include USD/SGD and EUR/TRY.
Exotics have lower liquidity, wider spreads, and higher volatility.
Experienced and risk-tolerant traders may find profit potential but need thorough research and risk management.
Keep in mind that different brokers and traders may slightly vary in how they classify these currency pairs.
Top currency pairs for beginner traders in Forex
For beginners in Forex trading, TU’s experts recommend starting with certain currency pairs that offer excellent learning and trading opportunities.
- EUR/USD
This pair combines the euro and the US dollar and is the most traded currency pair globally. It boasts low spreads, high liquidity, and stability, making it attractive for traders.
- USD/JPY
Pairing the US dollar with the Japanese yen, USD/JPY is driven by the yen’s influence in Asia and the dollar’s global prominence. It provides ample liquidity and narrow spreads.
- GBP/USD
Known as “Cable,” this pair includes the pound sterling and the US dollar. It represents a significant share of daily Forex transactions and is influenced by the relative strength of the British and American economies.
- AUD/USD
Pairing the Australian dollar with the US dollar, AUD/USD is influenced by commodity exports, especially metals and minerals. Interest rate differentials between Australia and the US also play a role.
- USD/CAD
Representing the US dollar against the Canadian dollar, USD/CAD is considered a commodity pair, closely tied to oil prices and economic indicators of both countries.
- USD/CHF
Combining the US dollar with the Swiss franc, USD/CHF is known as “Swissie” and is the seventh most traded currency pair worldwide. The Swiss franc’s value is influenced by the Swiss National Bank’s actions and economic data from Switzerland. Switzerland’s reputation for financial stability makes the CHF a popular safe-haven currency.
Conclusion
If you’re a newcomer to Forex trading, Traders Union has provided valuable insights into the best currency pairs for beginners in 2023. Understanding these pairs is fundamental, as they’re used to exchange one currency for another. Starting with the recommended pairs in this article, beginners can embark on their Forex journey with confidence and learning opportunities.
