It’s fair to say that most forex traders are primarily focused on the market’s eight major currencies, with the subsequent seven major pairings comprising 68% of total daily trading volumes.

However, there are around 170 currencies currently in circulation globally, the majority of which are classed as minor or exotic assets.

In this post, we’ll appraise four of the most popular currencies in circulation, while considering the most widely traded pairings.

What are the Most Popular Currencies?

Of the world’s eight major currencies, there are some that remain more popular and influential than others. Here’s our selection of the top four:

1. The US Dollar (USD):

Also known as the greenback, the USD is central to forex market transactions and acts as the largest reserve currency in the world. In fact, it often acts as the intermediary in triangular currency transactions, while many countries have adopted this as their official currency in lieu of a local alternative.

2. The Euro (EUR):

This is the second most traded currency behind the USD, while it’s established as the official currency of 27 EU member states. Additionally, many other nations in Europe (and some in Africa) peg their own currencies to the EUR, in order to help stabilize relevant exchange rates.

3. The Japanese Yen (JPY):

Next up is the single most traded Asian currency, and one that’s widely viewed as a proxy for the underlying strength of Japan’s export-driven economy. This currency also offers an insight into the health of the performance of the Pan-Pacific region as a whole.

4. The British Pound (GBP):

Also referred to as pound sterling, this is the fourth most traded currency on the forex market. Although the currency has weakened since 2016 against the backdrop of Brexit, it’s a tremendous gauge of economic performance in the UK and often boasts high value relative to its peers.

5. What About Major Currency Pairs?

As derivative assets, currencies are widely traded against one another in pairs, enabling investors to speculate on price movements and profit even in a widely depreciating marketplace.

But what are the major currency pairs? Unsurprisingly, the EUR/USD is the single most popular, accounting for around 24% of daily forex trades as recently as 2019.

This pair not only represents the two largest economies in the world, but its high trading volumes drive optimal levels of liquidity and generally benefit from tighter spreads.

Next up is the USD/JPY, which currently accounts for 13.2% of all daily forex transactions. Also renowned for its high levels of liquidity, the USD/JPY pairing is relatively stable in the market and tends to offer a viable safe haven in a volatile market.

Finally, we have the GBP/USD, which is colloquially referred to as ‘cable’ due to the deep-sea cables that used to deliver the bid-ask quotes between London and New York.

In 2019, this pairing comprised 9.6% of total daily trading volumes, with this asset underpinned by the enduring strength of the UK and US economies.

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