Forex traders speculate on price changes in FX pairs like EUR/USD, GBP/USD and USD/JPY.
In each pair there is always a quote currency and a base currency. The base currency is on the left and the quote currency is on the right and what this means is that you are speculating in price movements of the quote currency in the pair against the base currency.
For example, if you decided to trade the GBP/USD pair, you would effectively be trading on the price movements of GBP against the US dollar.
There are a wide variety of global FX pairs available to trade and prices are predominantly determined by large scale interbank trading.
When you trade Forex at ETX you are speculating on price movements in the underlying market, rather than buying or owning physical currency reserves.
Forex price movement and volatility are influenced by a number of important factors including major political events like general elections, referendums and speeches, economic data releases and central bank decisions like interest rate changes or quantitative easing and can even be impacted by natural disasters.
Global Forex markets are dominated by a handful of big currency pairs and these include predominantly US dollar led pairs such as: EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, USD/CAD and NZD/USD.
By most estimates these seven Forex pairs account for around 80% of global FX trading volume.
What are 'major' Forex pairs?
Some of the most popular Forex markets in the world have unique aspects and interesting colloquial names. Below is a list of what are often referred to as the FX “majors”, the pairs with the highest global trading volume and biggest influence on markets:
EUR/USD – Often referred to informally as the “Eurodollar,” EUR/USD is comfortably the world’s most heavily traded Forex pair. This FX pair dominates global financial sentiment in large part because it comprises the currencies of the world’s biggest economies in the form of the United States and Europe.
USD/JPY – Sometimes called “Gopher,” the USD/JPY pair is heavily traded around the world and represents the strength of the US dollar against the Japanese Yen.
GBP/USD – one of the oldest currency pairs in the world, “Cable” is still one of the most popular and reflects the strength of the British pound sterling against the United States dollar.
USD/CHF – The pair that looks least at home in a list of major pairs, the “Swissy” is heavily traded around the world due in part to the Swiss franc’s status as a safe haven investment
Which Forex pairs can I trade at ETX?
You can trade over 60 major and minor FX pairs at ETX with a Spread Betting or CFD trading account. Below is a small selection of some of our most popular Forex markets.
Cable is one of our most popular Forex markets with a number of trading opportunities over the past few years presented by the market uncertainty around major events like Brexit and the election of Donald Trump.
Because of the strong cultural, business and economic ties between the United States and the United Kingdom as well as the large volume of trade between the countries, GBP/USD is popular with investors on both sides of the Atlantic.
You can trade GBP/USD as a Spread Bet or as a CFD at ETX with tight spreads from just 0.9 pips.
The Eurodollar is by far the most heavily traded currency pair in the world and its high liquidity and relative stability offers traders key trading opportunities.
The EUR/USD pair is much newer than most established Forex trading pairs having only started heavy trading in 2002 when the twelve European member states introduced bank notes and coins as legal tender.
You can trade the Eurodollar as a Spread Bet or as a CFD at ETX with tight spreads from just 0.6 pips.
Sometimes referred to as the “Chunnel” in reference to the tunnel between the UK and Europe, GBP/EUR is a key FX pair and reflects the strong economic connection between the United Kingdom and wider Eurozone members.
GBP/EUR has been a particularly interesting currency pair for traders since the 2016 Brexit vote as volatility, uncertainty and negotiations have created trading opportunities in both directions.
You can trade the GBP/EUR as a Spread Bet or as a CFD at ETX with tight spreads from just 0.9 pips.
The “Aussie,” is a commodity driven Forex pair that reflects changes primarily in fluctuating Commodity trading between the US and Australia, in particular mining.
AUD/USD is a “minor” FX pair and does not command the same type of high volume as any of the major FX pairs but can still offer traders plenty of opportunities, especially in times of volatility.
You can trade the AUD/USD as a Spread Bet or as a CFD at ETX with tight spreads from just 0.8 pips.
The EUR/CHF currency pair pits two generally stable, safe economies with very strong cultural and economic ties against each other.
The Swiss franc has traditionally been seen as a safe-haven investment in times of volatility and the FX pair is popular among traders for its relative steadiness.
You can trade EUR/CHF as a Spread Bet or as a CFD at ETX with tight spreads from just 1.9 pips.
Is Forex trading for me?
Forex trading could be for you if you are looking for a wide range of flexible global trading opportunities with around the clock access to the markets.
When you trade FX at ETX you can open both long and short positions on major, minor, exotic and emerging currency pairs which cover regions like the US, UK, Europe, Asia and Australasia.
You’ll be able to take advantage of high liquidity in the FX market to enjoy tight spreads and, with plenty of volatility in global currency markets, there are plenty of trading opportunities for smart traders.
Read the next section of our Forex trading guide to learn more about how to trade some of the FX pairs we’ve covered here, including tips and strategies for identifying trading opportunities and managing your risk intelligently.