What Is the Best USD Pair to Trade?
The foreign exchange market is a global marketplace where currencies are bought and sold. It’s the largest and most liquid financial market in the world, with an average daily trading volume of over $5 trillion. The most popular currency in the forex market is the US dollar, which makes it the base currency in most currency pairs.
When it comes to trading forex, one of the most critical decisions you’ll make is which currency pairs to trade. While some traders prefer exotic pairs, the majority of them focus on major currencies, including the US dollar. In this article, we’ll explore the best USD pairs to trade and why they’re so popular among traders.
USD/EUR
The USD/EUR is the most traded currency pair in the world, representing approximately 23% of the global forex market. The EUR/USD currency pair trading popularity is due to the fact that the euro is the second-most traded currency after the US dollar, and the eurozone is a major trading partner with the United States. Additionally, the US and European economies are heavily intertwined, making them highly sensitive to each other’s economic and political developments.
The USD/EUR pair offers low spreads and high liquidity, which makes it an attractive choice for day traders and scalpers. Additionally, it is less volatile than other US dollar pairs, making it a good choice for traders who prefer a more stable market. However, the USD/EUR can be impacted by political and economic developments in Europe, for example, Brexit, political unrest, and changes in economic policies.
USD/JPY
The USD/JPY duo is the second-most traded currency pair in the world, representing approximately 13% of the global forex market. Its popularity is due to the fact that the Japanese yen is a safe-haven currency, meaning that investors tend to buy the yen in times of market volatility and uncertainty. Additionally, Japan is a major trading partner with the United States, making the pair highly sensitive to economic and political developments in both countries.
The USD/JPY set offers tight spreads and high liquidity, which makes it an attractive choice for day traders and scalpers. Additionally, the pair is highly volatile, so it’s a good choice for traders who prefer a more dynamic market. However, the USD/JPY can be impacted by geopolitical tensions, trade wars, and economic policies in both the US and Japan.
USD/GBP
The USD/GBP pair is the third-most traded currency pair, representing approximately 9% of the global forex market. The British pound is the fourth-most traded currency in the world, and the UK is a major trading partner with the United States. Additionally, the duo can be impacted by political and economic developments in both countries, including Brexit and trade agreements.
The USD/GBP pair offers moderate spreads and high liquidity, making it an attractive choice for swing traders and long-term investors. However, the USD/GBP set can be impacted by political and economic developments in the UK and the US, including trade agreements, interest rates, and economic policies.
USD/CAD
The USD/CAD pair takes fourth place in the world in terms of trading, representing approximately 5% of the global forex market. Canada is one of the major trading partners with the United States, and the Canadian dollar is heavily influenced by oil prices. Additionally, the pair can be impacted by economic and political developments in both countries, including trade agreements and interest rates.
The USD/CAD duo offers low spreads and high liquidity, so it’s an attractive choice for day traders and scalpers. However, it can be impacted by fluctuations in oil prices, which can cause volatility and uncertainty in the market.
USD/CHF
The USD/CHF pair is another popular currency pair, representing approximately 4% of the global forex market. The pair’s popularity is due to the fact that the Swiss franc is considered a safe-haven currency, similar to the Japanese yen.
Additionally, Switzerland is a major financial center and a hub for international trade and commerce, making it a significant trading partner with the United States. However, the USD/CHF pair can be impacted by political and economic developments in Switzerland, including interest rates and currency interventions by the Swiss National Bank.