What Are the Major Forex Trading Instruments? Introduction to Key Forex Pairs

The forex market includes hundreds of currency pairs, covering the most commonly traded ones. With a wide variety of forex instruments, traders can find options that suit any trading strategy. So, what are the major forex trading instruments? Below, we introduce the key forex pairs.

The primary forex trading instruments are the most frequently traded currency pairs, such as the US dollar (USD), euro (EUR), Japanese yen (JPY), British pound (GBP), Canadian dollar (CAD), Australian dollar (AUD), New Zealand dollar (NZD), and Swiss franc (CHF). As the world’s major currencies, these pairs account for a significant portion of daily forex trading volume. Notably, the EUR/USD pair alone makes up over 20% of total forex market volume.

Each major forex pair has unique characteristics, and understanding these can help traders profit. For example:

• US Dollar (USD): As the world’s reserve currency, nearly all forex pairs are directly influenced by USD movements. Monitoring the US Dollar Index (DXY) is crucial, as it significantly impacts overall forex market trends.

• Japanese Yen (JPY): The yen is a top safe-haven currency. During global risk-off events (e.g., terrorist attacks, wars, nuclear tests, or stock market crashes), the JPY tends to surge, presenting trading opportunities.

• New Zealand Dollar (NZD): A key commodity currency, the NZD is sensitive to global commodity prices (e.g., gold and crude oil). Additionally, New Zealand’s strong dairy industry means dairy product prices heavily influence the NZD’s exchange rate.