Currencies are always traded in pairs, because the trader is actually buying one currency and selling another at the same time. A currency pair itself can be thought of as a single unit, an instrument that can be bought and sold. Examples include the Euro and the US Dollar (EUR/USD), or the British Pound and the Japanese Yen (GBP/JPY).

Major Currency Pairs

The currency pairs listed below are considered to be the "major currency pairs". These most traded currency pairs all contain the U.S. dollar (USD), which accounts for 80% of all transactions in the Forex market.

The 7 major currency pairs are usually traded with tight spreads, which is the difference between the buy and sell price, thus lowering traders cost.

A currency pair that does not contain USD is called a cross currency pair, such as GBP/JPY. A currency pair that involves the euro is often called euro cross, such as EUR/GBP.

Other than major currency pairs, other types of currency pairs, such as minor and exotic currency pairs, are also traded in the market, although with a much lower trading volume. 

Minor Pairs

A currency pair that is not paired with the US dollar but consists of the Euro, British Pound and Japanese Yen is a minor pair. These are the three most traded currencies in addition to the US dollar.

Exotic  Pairs

Emerging economy currencies paired with major currencies. These pairs are not traded as frequently as major or minor currency pairs. It includes: USD/PLN (US Dollar against Polish Zloty), GBP/MXN (Pound Sterling against Mexican Peso), EUR/CZK, etc.

Regional Pairs

Currency pairs classified by region - e.g. Scandinavia or Oceania. Includes: EUR/NOK (Euro to Norwegian Kroner), AUD/NZD (Australian Dollar to New Zealand Dollar) and AUD/SGD.