Majors in forex
Family I · Instruments
Not to be confused with majors in forex.
Majors in forex are the currency pairs that account for the largest share of daily turnover in the global foreign exchange market. They almost always include the US dollar on one side and the currency of a major developed economy on the other. Their high liquidity and tight spreads make them the reference point for pricing other pairs.
Composition and liquidity
The exact list of majors varies by source, but the most commonly cited pairs are EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD and NZD/USD. Some classifications also include USD/CNY or exclude the commodity-linked pairs. Because these pairs are traded in enormous volumes, they typically have the narrowest bid-ask spreads and the deepest order books. Liquidity is highest during the overlap of the London and New York sessions.
Worked example: pip value in a major pair
Suppose a trader buys 1 standard lot (100,000 units) of EUR/USD at 1.1050 and closes at 1.1075. The pip value is calculated in the quote currency (USD).
Role in the market
Majors serve as the primary vehicles for speculative trading, hedging and central bank intervention. Their exchange rates are widely quoted and used as benchmarks for cross rates. For example, EUR/GBP can be derived from EUR/USD and GBP/USD. Because of their liquidity, majors are often the first pairs offered by brokers and the ones with the smallest minimum trade sizes. However, spreads, leverage and available pairs are set by individual brokers and can differ by jurisdiction.
Often confused with
- majors in forex
- The term 'majors' is the short form of the same concept, while 'majors in forex' specifies the asset class; the visible sign is that the longer phrase always includes 'in forex' when the context is not already clear.