How Many Currencies Are Traded In The FX Market?

Common Currencies traded in the FX Market.
Currency Name
Country Name
Symbol
Short Name
US Dollar
US
USD
Greenback
Pound
UK
GBP
Cable
Swiss Franc
Switzerland
CHF
Swissy
Japanese Yen
Japan
JPY
Yen
Canadian Dollar
Canada
CAD
Loonie
Euro
Euro Members
EUR
Fiber
Australian Dollar
Australia
AUD
Aussie
New Zealand Dollar
New Zealand
NZD
Kiwi
In the FX market, currencies are traded in pairs e.g. EUR/USD, USD/CAD, GBP/USD and USD/JPY etc. In pairs, the numerator is called the 'base' currency while the denominator is the 'counter' or 'quote' currency. While the gamut of currencies traded worldwide covers practically every national currency, in a practical sense, only a few are actively traded.
Currency trading usually covers those countries which are economically sound and politically stable. For example, the US dollar, Japanese Yen and the Euro are the world's most actively traded currencies, based on their economies' reputation for being reliable, stable and standard. In a broader spectrum, the eight most traded currencies are the U.S. Dollar (USD), the Canadian Dollar (CAD), the Euro (EUR), the British pound (GBP), the Swiss franc (CHF), the New Zealand dollar (NZD), the Australian Dollar (AUD) and the Japanese Yen (JPY).
--- advertisment --- U.S. Dollar - Official currency of the United States of America; also known as Buck or Greenback British Pound - Also known as Sterling, Pound Sterling, British Pound or the Cable (for the GBP/USD pair), it is the currency of the United Kingdom and its dependencies. Canadian Dollar - Official currency of Canada. Also known as LoonieJapanese Yen - Official currency of Japan, the Yen.Swiss Franc - Official currency of Switzerland, commonly referred to as Swissy.Euro - The euro is the currency of 12 of the 25 nations that form the European Union; also known as Fiber.Australian Dollar - The official currency of the Commonwealth of Australia; also known as Aussie.New Zealand Dollar - The New Zealand dollar, often informally referred to as the Kiwi.
There are almost 27 pairs that come out of the combination of the above 8 currencies. However, 18 out of the possible 27 pairs are most commonly traded, hence highly liquid and easy to trade. These pairs are:
USD/CAD
EUR/USD
USD/CHF
EUR/GBP
USD/JPY
AUD/CAD
GBP/USD
GBP/CHF
NZD/USD
GBP/JPY
AUD/USD
CHF/JPY
EUR/CAD
AUD/JPY
EUR/AUD
AUD/NZD
EUR/JPY
EUR/CHF
Understanding currency pairs and tradingEUR/USDHere, the Euro is the base currency and the Greenback is the counter Currency. If the Euro weakens, the pair will fall, and vice versa, other things being equal. On the other hand, if the US economy is expected to weaken, the US dollar is likely to fall, in which case one is advised to make a short trade on the US dollar. In such a case, the pair offers a good opportunity to trade long and short and at the same time, create a sort of hedge.