Currency Pairs: How You Can Benefit from Widely Traded Currency Pairs

Find out what currency pairs are, how they work and how you can use them to build wealth.

Last updated:

If you’ve ever watched or read a report on the global financial markets, you will have noticed that the value of currencies is always quoted in pairs. For example, 1 AUD = X amount of USD, or 1 EUR = X
amount of USD. These are called currency pairs and they allow you to determine the value of one currency relative to another on the global foreign exchange market.

Plus500 Forex Trading Offer

Access more than 2000 financial instruments with a Plus500 trading account including share market CFDs, forex, indices and commodities. Pay no sign up fees, no ongoing subscription fees and no commission on trades.
Finder exclusive bonus offer: Open a new trading account and receive a welcome bonus of AU$60 when you deposit your first $200 into the account and enter the bonus code “Special200”. T&C’s apply.

Promoted

Updated July 22nd, 2019
Name Product Minimum Opening Deposit Minimum Spreads for Major Currencies Commission Minimum Trade Size Platforms
AU$100
0.7 - 3.0 pips
$0
0.01 lots
Plus500 Web Trader
Finder exclusive bonus offer: Open a new trading account and receive a welcome bonus of AU$60 when you deposit your first $200 into the account and enter the bonus code “Special200”. T&C’s apply.
Open an account and experience Plus500's easy-to-use proprietary trading platform, 24/7 online chat support and free real-time forex quotes.
$0
0.5 - 1.22 pips
$0
0.01 lots
MetaTrader 4
At Pro
Advantage Web
Choice of trading platforms, integrated Reuters news and device-synching so you can monitor trades across multiple devices.
$0
0.6 - 1.5 pips
$0
1 lot
MetaTrader 4
ProReal Time
Introductory offer: For the first two weeks of trading, take advantage of IG's lower minimum trade sizes to help you build confidence.
Choice of trading platforms. Choose optional extras like advanced charting, reporting and order types. Over 90 currency pairs to choose from.
AU$3,000
0.6 - 1.1 pips
$0
5,000 units
SaxoTrader
SaxoTraderGO
Competitive spreads, plus integrated news spreads and reports from Saxo's team of in-house analysts.
$200
1.0 pip
$0
$200 (to CopyTrade)
eToro Trading Platform
Social trading, advanced charting tools, plus receive exclusive benefits through the eToro Club (membership is tiered based on the equity in your trading account).
US$200
0.0 - 0.1 pips
AU$3.50 per 100k traded
0.01 lots
MetaTrader 4
MetaTrader 5
cTrader
Choose from a range of fee-free funding methods, plus a suite of 10 different apps available as part of Pepperstone's Smarter Trading Tools.
AU$200
0.0 pips - 1.0 pips
$0
0.01 lots
MetaTrader 4
MetaTrader 5
WebTrader
Standard STP or raw ECN accounts available. Choose from 15 different trading platforms. A host of bonuses, rebates and promitions on offer to suite any trader.
AU$200
0.1 - 1.1 pips
$0
0.01 lots
MetaTrader 4
MetaTrader 5
Low minimum opening deposit, real-time news and pricing, and customisable alerts based on news or technical trading indicators.
$200
From 0.0-0.1 pips
AU$3.50 per 100k traded
0.01 lots
MetaTrader 4
MetaTrader 5
cTrader

Compare up to 4 providers

Min. Transfer Amount Transfer Speed Online Transfer Fee Rate Amount Received Description CTA Details
AUD 200 1 day AUD 0.00 0.701 USD
7,013
TorFX guarantees to match any competitor's exchange rate. Conditions apply.
Send money overseas in 30+ currencies with competitive rates for transfer amounts over $2,000.
Go to site Show details
AUD 2,000 1 day AUD 0.00 0.702 USD
7,016
Send 60+ currencies at competitive rates with $0 transfer fees for Finder customers. WorldFirst will beat any eligible quote from another provider. Go to site Show details
AUD 250 1 - 2 days AUD 0.00 0.702 USD
7,017
$0 transfer fees for Finder customers.
No-maximum limit transfers with competitive exchange rates for 100+ currencies. No transfer fee over AUD$10,000.
Go to site Show details
AUD 1 1 - 2 days AUD 45.00 0.705 USD
7,013
Make online transfers at the mid-market rate with transparent fees in 45+ currencies. Go to site Show details
AUD 250 1 day AUD 0.00 0.701 USD
7,015
Sign up through Finder and get a $50 Myer gift card when you send $10,000 or more. T&Cs apply.
SendFX guarantees to match any competitor's exchange rate. Fee-free transfers in 30+ currencies to over 200 countries.
Go to site Show details
AUD 200 1 day AUD 0.00 0.701 USD
7,008
Low minimum transfer amount of just AU$200, with no set-up fees or transfer fees. Go to site Show details
AUD 5 1 - 2 days EUR 3.00 0.698 USD
6,980
Special offer: Pay zero fees on your first 5 transfers.
Get bank-beating exchange rates and fast transfer times on 15+ popular currencies.
Go to site Show details
AUD 1 Within an hour AUD 3.99 0.696 USD
6,958
An online money transfer service with cash pickup, bank account to bank account and airtime transfers available. Go to site Show details
AUD 3,000 1 day AUD 0.00 0.7 USD
6,996
Global Reach will match any competitor's exchange rates. Conditions apply.
No transfer fee when transferring more than £10,000 or equivalent. Send money in over 130 currencies. No maximum transfer amount.
Go to site Show details
AUD 1 1 day AUD 0.00 0.697 USD
6,975
With global payments provider XE, enjoy fast and secure transfers and a range of foreign currency tools and calculators while benefiting from $0 transfer fees. Go to site Show details
AUD 200 1 - 2 days AUD 50.00 0.705 USD
7,010
Exclusive: Finder customers receive $15 off their first transaction. T&Cs apply.
Quick and simple international money transfers with zero-margin exchange rates. There's a flat 0.5% transfer fee for most transfers. Earn loyalty points on sign up, referral and every transaction.
Go to site Show details

Compare up to 4 providers


The "Rate" and "Amount Received" displayed are indicative rates that have been supplied by each brand or gathered by Finder.

Exchange rates are volatile and change often. As a result, the exchange rate listed on Finder may vary to the actual exchange rate quoted for the brand. Please confirm the actual exchange rate and mention "Finder" before you commit to a brand.

Updated July 22nd, 2019
Name Product Monthly fee Standard Brokerage Fee Margin trading - Online IPOs / Floats International
$0
$8.00 or 0.1%
Yes
No
Yes
Low brokerage fees on Australian and international shares.
$0
$6.99 or 0.1%
Yes
No
Yes
Access over 19,000 Australian and global shares.
$0
$15 for first 10 trades
Yes
Yes
No
Enjoy tiered brokerage fees, Bell Potter research and eligible market-to-limit orders placed onto the ASX in under a second. For a limited time, get a custom deal based on your trading preferences when you switch to Bell Direct.
$0
$11 for first 10 trades
Yes
No
Yes
Trade shares, warrants, options, EFTs, managed funds, bonds and IPOs with CMC Markets today.
$0
$9.50
No
No
No
Trade ASX-listed shares for a flat fee of $9.50, regardless of the trade size. New customers receive free access to Community Insights with SelfWealth Premium for the first 90 days. Follow other investors and benchmark your portfolio performance.

Compare up to 4 providers

Disclaimer: Trading in financial instruments carries various risks, and you can lose more than your capital. This article may contain general advice. You should always seek professional advice when deciding if a product is right for you.

What is a currency pair?

Currencies on the foreign exchange market are always traded in pairs - you always buy or sell one currency against another. For example, you might use your Australian Dollars to buy some US Dollars, or your US Dollars to buy British Pounds. A currency pair therefore allows you to see the value of one currency as compared to another.

The first currency quoted in a pair is called the base currency, the second is called the quote currency.

Back to top

How does a currency pair work?

The value of a currency pair will rise and fall based on a wide range of factors. Look back at a graph of the performance of the Australian Dollar relative to the US Dollar over the past 10 years and you’ll see fluctuations up and down that have been caused by a variety of factors.

The appreciation or depreciation in value of one currency will affect the other. For example, when the USA was hit by the subprime mortgage crisis in 2008, the value of the US Dollar dropped substantially relative to most of the world’s major currencies.

The laws of supply and demand will also cause a currency’s value to rise and fall. If the outlook looks positive for a country’s economy, there may be high demand on global forex markets for its currency. This could drive the currency’s value up relative to other currencies.

If a country has too many imports relative to the amount of goods and services it exports, this can lead to an imbalance of trade and prompt a drop in the value of a currency. And because the value of a currency is one of the biggest indicators of the performance of a nation’s economy, it can even have an impact on a country’s Gross Domestic Product (GDP) and cash rate.

For example, if the value of the Australian Dollar decreases compared to other major currencies, you would expect to see an increase in exports and therefore in GDP as Australian-made products become cheaper overseas. The stability of the Dollar is also one of the key factors the RBA considers when deciding whether to raise, cut or not touch the official cash rate - for example, raising the cash rate can lead to an increase in the value of the Dollar as investors turn to Australia for high yield.

Back to top

What are the most popular currency pairs?

The US Dollar is the most commonly traded currency in the world - in April 2013, it made up more than 87 per cent of the daily share on global foreign exchange markets. It is followed by the Euro, the Japanese Yen, the Pound Sterling, the Australian Dollar and the Swiss Franc.

Below is a list of the most popular currency pairs:

Back to top

How do I know when is the right time to exchange my currency pair?

You’ll need to take a number of factors into account in order to determine when is the right time to buy or sell a particular currency. In terms of the AUD/USD currency pair, you could examine the official cash rate and any predicted changes from the Reserve Bank, inflation figures and the overall level of consumer confidence. Another factor to consider is the much talked about housing bubble in Australia - if that bubble were to burst and property prices plummeted, the Australian Dollar would drop and may not represent good value for investors.

As mentioned above, supply and demand for exports and imports can play a huge part in determining how a currency will perform now and into the future. Similarly, economic crises can lead to a significant downturn in a country’s economy and therefore the value of its currency. For example, the Global Financial Crisis of 2008 spread across the Eurozone, prompting the value of the Euro to drop against most major currencies.

You therefore need to examine a range of factors to formulate an idea about whether the value of a currency is expected to rise or fall in the future, and then trade accordingly.

Back to top

What are things to avoid about currency pairs?

The main issue associated with trading currency pairs is that it is a complex investment method. As this article shows, there are many factors that can affect the performance of a currency, so predicting whether its value will rise or fall in the future is a risky business. You need to make sure you’re fully aware of all the risks involved in trading currency pairs before you part with any of money.

Frequently asked questions

Was this content helpful to you? No  Yes

Related Posts

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Ask a question
Go to site