Major currency pairs are connected to the strong economies they represent with both the base and quote currencies traded in high volumes daily. As a result, the spreads for these pairs are low, making them attractive options for traders.
When trading any currency pair, it is important to keep abreast of the latest economic news, major economic events, geopolitical changes, economic data releases, and announcements and be aware of the ways in which they could affect the prices of currencies.
In the following overview, you will familiarize yourself with some of the most significant factors to look out for when trading some of the most popular major forex pairs.
–EUR/USD: The ‘Eurodollar’ is one of the most popular forex pairs among traders. This pair represents two of the strongest economies in the market: Europe and the US. Trading this currency pair requires staying up to date with social and economic developments in both countries as well as following data releases such as GDP reports, the NFP reports in the US, unemployment data, CPI, and more.
-USD/JPY: The US Dollar – Japanese Yen currency pair is related to the US and Japanese economies offering a solid comparison between the two global economic pillars. When trading this pair, you should keep an eye on Federal Reserve and Bank of Japan announcements and changes in interest rates.
-GBP/USD: The exchange rate for the pound sterling against the US dollar forex pair is determined by the conditions in the UK and US economies. Due to Brexit, the UK is no longer part of the European Economic Community and the pound sterling could be largely dependent on the UK economy.
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