The question often comes up among forex traders (especially newer ones) as to which are the most traded currency pairs. There’s no central source of information from which we can figure out how the various currency pairs rank, but we can look to the periodic surveys done my the central banks and monetary authorities of the major global regions to get an idea. These reports are based on the survey of banks, so they don’t really capture activity on the retail level. That is currently only about 5% of total daily volume, though, and market prices are set in the inter-bank market in any case, so we’re not really missing much in the survey data.
Global Most Traded Currency Pairs
Coming up with a solid global ranking outside the top couple of forex pairs is a challenge because the regional reports tend to focus on the main pairs traded in those regions and don’t parse out some of the less active ones. For example, the USD/CAD and USD/CHF currency pairs are not reported individually in the Japanese data, so it’s hard to get them in the proper rank order. The list below is probably a pretty close representative of how things rank on a global basis, though (based on April 2011 data).
It should be noted that EUR/USD is way ahead of the other most traded currency pairs in terms of daily trading volume. That one pair does something like 50% more volume globally than both USD/JPY and GBP/USD combined.
You will notice that I did not include the more regionally-oriented forex pairs like USD/MXN, EUR/SEK, USD/KRW, etc. If you’re interested in them, I recommend exploring the individual report (links are provided below). Also, these figures are based on spot market volume, and do not include swaps, forwards, or options.
What Forex Pairs Should I Trade?
If you are a short-term trader then you’re going to want to focus on the most traded currency pairs because they are generally active enough in that time frame to be worthwhile, and also offer the best bid/ask spreads. If you are specifically a day trader or scalper, you’ll want to focus on the the top forex pairs for the region you trade in to further ensure the best trading conditions. Traders who operate in longer-term swing and position trades, though, need not concern themselves as much with focusing on the most traded currency pairs, though. The costs and requirements for short-term movement are not a real issue.
Most Traded Currency Pairs by Region
Here is a center-by-center breakdown of the top forex pairs for each region. Again, this is for spot trading only. Swaps, forwards, and options can add considerably to the volume totals (more in some regions than in others). If you want to see the full center totals you can follow the links to the individual reports.
London remains by far the highest volume trading center for foreign exchange. It therefor won’t come as much surprise that the global pair ranking is very similar to the one for this specific center. Based on the most recent data, here are the most traded currency pairs in for the London market.
As was the case with the global figures, EUR/USD does about 50% more volume itself than the next two pairs combined. There are a lot of pretty active regional pairs (non-Euro Zone continental currencies) as well as those listed above. See the Bank of England website for additional details.
U.S. (New York)
The second largest of the trading centers is the U.S., with New York still the main focal point. Here are the most traded currency pairs in for this region.
The top non-majors currency pair in this region is USD/MXN, with USD/BRL only doing about a third of that volume. See the New York Fed website for additional details. Note that the Canadian Foreign Exchange Committee also does a volume survey, but it does not break the figures out into individual currency pairs.
Here are the most traded currency pairs in for the Japanese market. As indicated above, the Japanese report does not have very much depth in terms of specifically parsing out the most traded currency pairs, so the list isn’t as long as for other regions.
There is a big drop off from USD/JPY to the EUR pairs,with the former doing between three and four times as much volume. Similarly, then another big drop to the other two most traded currency pairs from the EUR ones. See the Tokyo Foreign Exchange Market Committee website for further details.
Australia (primarily Sydney) has become a very significant market in global foreign exchange on a total volume basis. It’s not a broad market, however, in that trading in the Aussie dollar dominates (not surprisingly). Here are the most traded currency pairs.
Among the pairs trading in Australia, AUD/USD does about four times as much volume as EUR/USD, and it drops rapidly off even further after that. See the Reserve Bank of Australia website for further details.
Singapore can’t compare to London or New York for sheer trading volume, but it is a broad-based market where most of the major Asian regional currencies trade. Here are the most traded forex pairs.
The volume pattern in Singapore shows EUR/USD with nearly 2.5 times as much volume as USD/JPY. Interestingly, EUR/USD does about as much volume in Singapore as in Australia, both of which do about double the volume in Japan. See the SFEMC website for more details.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
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