In short
- A pair shows how much of the quote currency one unit of the base currency costs.
- Majors are cheapest to trade; exotics most expensive.
- Start with one or two liquid pairs.
Reading a quote
GBP/USD 1.2710 / 1.2712 means you can sell one pound for 1.2710 dollars (bid) or buy one for 1.2712 (ask). The 0.0002 difference is a 2-pip spread.
Types of pairs
| Type | Examples | Typical spreads |
|---|---|---|
| Majors | EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, USD/CAD, NZD/USD | Tightest |
| Crosses (minors) | EUR/GBP, GBP/JPY, EUR/JPY, EUR/CHF | Moderate |
| Exotics | USD/TRY, EUR/ZAR, USD/MXN | Widest |
UK retail leverage is capped at 30:1 on major pairs and 20:1 on others.
Nicknames
- Cable — GBP/USD
- Fiber — EUR/USD
- Gopher — USD/JPY
- Swissie — USD/CHF
- Aussie and Kiwi — AUD/USD and NZD/USD
- Loonie — USD/CAD
Correlations
Some pairs tend to move together — GBP/USD and EUR/USD often do, while EUR/USD and USD/CHF often move in opposite directions. Holding several correlated positions increases your real risk.
Frequently asked questions
Which currency pair is best for beginners?
Liquid majors such as EUR/USD and GBP/USD have tight spreads and plenty of information. UK traders often also watch EUR/GBP.
Why are exotic pairs riskier?
They have wider spreads, lower liquidity, larger gaps and often higher financing costs.
CFDs and spread bets are complex instruments and come with a high risk of losing money rapidly due to leverage. Most retail investor accounts lose money when trading these products. You should consider whether you understand how they work and whether you can afford to take the high risk of losing your money. Content is general information, not financial or tax advice.