The pair, namely the "currency pair", means the currency of one country, expressed in the currency of another country. The value of one currency against another currency is also determined by the economic situation comparison of that country. So when we say EUR / USD, it represents the value of EUR against USD. Here, EUR represents the European Union currency, ie EURO, and USD represents the US currency. The EUR is called BASE currency here, and the USD is called the counter currency.
In financial markets, parities are classified as major, minor and exotic parities. The most traded are considered Major; they represent 80% of the trading transactions.
MAJOR PARITY refers to parities consisting of two major currencies. Major currencies denoting countries or unions with high economic size; It is American Dollars (USD), Euro (EUR), British Pound (GBP), Australian Dollars (AUD), Canadian Dollars (CAD), Swiss Franc (CHF) and Japanese Yen (JPY). At the price of major parities; Although one of them is more dominant, both currencies have a strong effect.
The most traded Major Parities:
EURUSD (Euro / US Dollar)
USDJPY (American Dollars / Japanese Yen)
USDCHF (American Dollars / Swiss Francs)
GBPUSD (British Pound / American Dollar)
AUDUSD (Australian Dollar / American Dollar)
USDCAD (American Dollars / Canadian Dollars)
MINOR PARITIES it consists of a major currency and a minor currency. Although there is a lower trading volume compared to major parities, there is generally the demand of local investors. Although USD / ZAR is a highly demanded parity in South Africa, it is in the minor parity group. In minor parities, the course generally determines the major currency, but the general course progresses depending on the economic developments in both countries. Among the minor currencies, the most traded are the New Zealand Dollar (NZD), the South African Rand (ZAR) and the Singapore Dollar (SGD).
EXOTIC PARITIES are parities that are followed by local investors and have a low total trading volume. Turkish Lira, Polish Ziloti, Mexican Peso, Danish Krona, Saudi Arabian Riyal, Taiwan Dollar, Brazilian Real and Russian Ruble are examples to exotic parities.
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