Forex Market Pairs & Trading Hours
Currencies are traded as pairs in Forex trading. The Pairs are broken down into groups: majors, minors, crosses, and exotics.
The Majors are the most heavily traded currencies.
- AUDUSD – Australian Dollar / US Dollar
- EURUSD – Euro / US Dollar
- GBPUSD – Great Britain Pound / US Dollar
- USDJPY – US Dollar / Japanese Yen
- USDCAD – US Dollar / Canadian Dollar
- USDCHF – US Dollar / Swiss Franc
You will notice that the USD is in each of these pairs. That’s because it’s the world’s reserve currency and most trade currency.
The Minors or Crosses are combinations of major currencies not including the US dollar. Due to lower trade volume, these pairs can be more volatile than the majors. The GBPJPY and GBPAUD being examples of very volatile crosses.
Exotic Currency pairs are made up of major currencies paired with emerging or strong smaller economies currencies, such as the Hong Kong Dollar or the Swedish and Norwegian Kroner. These pairs have lower trading volumes than the majors and minors and can have higher trading costs.
Forex Trading Hours
The foreign exchange trading day is broken down into interbank sessions. The sessions are in order of open; New Zealand, Sydney, Tokyo, Frankfurt, London, and New York.
Traders mainly follow the major interbank sessions.
Sydney – opens at 7am and closes at 4pm
Tokyo – opens at 9am and closes at 6pm
London – opens at 5pm and closes at 2am
New York opens at 10pm and closes at 7am. (All times are AEST and times change depending on daylight savings time on the country.)
Looking at the above graph you will notice sessions overlap these can the busiest times for traders as deals are done in two sessions at once. The London and New York opens are favorite times for short term traders. Generally, the Sydney open and end of the New York session have the lowest volumes. Traders should be cautious during these stages of the day as moves can be wide due to lower liquidity.