The 8 Major Currencies in Forex Trading

The 8 Major Currencies

There are over 180 currencies in the world, but the forex market is dominated by just eight. These are called the major currencies, and they're involved in the vast majority of all trades:

The King: USD

The US dollar isn't just another currency. It's the world's primary reserve currency, meaning central banks around the globe hold large amounts of USD as part of their foreign exchange reserves.

The BIS 2025 survey shows that the USD is on one side of 89% of all forex trades. This doesn't mean 89% of trades are buying dollars. It means that in 89% of transactions, one of the two currencies being exchanged is USD. When you trade EUR/JPY, for example, USD is not involved, and that's the minority of trades.

Why is the dollar so dominant? Several reasons:

• Most commodities (oil, gold, copper) are priced in USD
• Most international debt is denominated in USD
• The US has the world's largest and most liquid bond market
• Historical legacy of the Bretton Woods system

Understanding Currency Codes

Currency codes follow the ISO 4217 standard. The system is simple:

• First 2 letters = country code (US, EU, GB, JP, CH, AU, CA, NZ)
• Last letter = first letter of the currency name (D for Dollar, P for Pound, Y for Yen, F for Franc)

So USD = United States Dollar, GBP = Great Britain Pound, JPY = Japan Yen. The euro is an exception: EUR doesn't follow the country pattern because it represents a region, not a single country.

Beyond the Majors

Outside the 8 majors, you'll encounter:

Minor currencies (also called "regional currencies"): SGD (Singapore Dollar), HKD (Hong Kong Dollar), NOK (Norwegian Krone), SEK (Swedish Krona), DKK (Danish Krone), MXN (Mexican Peso), ZAR (South African Rand).

Exotic currencies: TRY (Turkish Lira), THB (Thai Baht), INR (Indian Rupee), BRL (Brazilian Real), PLN (Polish Zloty), and many more. These currencies are called "exotic" not because the countries are exotic, but because they are traded less frequently and have wider spreads.

Reserve Currencies: Why They Matter

A reserve currency is one that central banks hold in significant quantities for international transactions and investment. The top reserve currencies are:

1. USD (58% of global reserves)
2. EUR (20%)
3. JPY (5.5%)
4. GBP (5%)
5. CNY/RMB (2.5%, growing)

Reserve status gives a currency unique advantages: higher demand, lower borrowing costs for the issuing country, and influence over global trade. It also means these currencies tend to be more stable and liquid than non-reserve currencies.

For you as a trader, this translates to tighter spreads and more predictable behavior on major pairs. This is why beginners should start with major currency pairs rather than exotics.