How to Use Currency Crosses to Trade the Majors?2 min read
A widely traded currency pair is the euro against the U.S. dollar or shown as EUR/USD. In fact, it’s the foremost liquid currency pair within the world because it’s the foremost heavily traded.1 The quotation EUR/USD = 1.2500 means one euro is exchanged for 1.2500 U.S. dollars. In this case, EUR is that the base currency and USD is that the quote currency (counter currency). This means that 1 euro are often exchanged for 1.25 U.S. dollars. Another way of watching this is often that it’ll cost you $125 to shop for 100 euros.
There are as many currency pairs as there are currencies within the world. The total number of currency pairs that exist changes as currencies come and go. All currency pairs are categorized consistent with the quantity that’s traded on a day to day for a pair.
The currencies that trade the foremost volume against the U.S. dollar are referred to as the major currencies, which include:
The final two currency pairs are referred to as commodity currencies because both Canada and Australia are rich in commodities and both countries are suffering from their prices. The major currency pairs tend to possess the foremost liquid markets and trade 24 hours each day Monday through Thursday. The currency markets open on Sunday night when Australia and Asia open for the week and shut on Friday at 5 p.m. U.S. Eastern time.
Currency crosses can provide clues about the relative strength of each major currency pair.