Chapter 2

Major and Minor Currency Pairs

In This Chapter

arrow Looking at the trading fundamentals and behavior of the major currency pairs

arrow Getting to know the small dollar pairs: USD/CAD, AUD/USD, and NZD/USD

The vast majority of trading volume takes place in the major currency pairs: EUR/USD, USD/JPY, GBP/USD, and USD/CHF. These currency pairs account for about two-thirds of daily trading volume in the market and are the most watched barometers of the overall forex market. When you hear about the dollar rising or falling, it's usually referring to the dollar against these other currencies.

Of course, speculative trading opportunities extend well beyond just the four major dollar pairs (currency pairs that include the USD). For starters, three other currency pairs — commonly known as the minor or small dollar pairs — round out the primary trading pairs that include the USD. This chapter takes a look at the various major and minor currency pairs to show how they fit into the overall market.

Banking on the Big Dollar: EUR/USD

EUR/USD is by far the most actively traded currency pair in the global forex market. EUR/USD is the currency pair that pits the U.S. dollar against the single currency of the Eurozone, the euro. The Eurozone refers to a grouping of countries in the European Union ...

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