Best Pairs To Trade In Forex In 2023 – With Tight Spreads

Last Updated October 3rd 2022

15 Min Read

Forex is one of the most volatile financial markets in the world today. Finding the best pairs to trade forex is also quite challenging, especially for beginner and intermediate traders. You can, however, increase your chances of making money in the currency market by creating and mastering a highly effective trading strategy and identifying top currencies with tight spreads.

Through this guide, we hope to help you make informed trading decisions by introducing you to what we consider the best currency pairs to trade in forex in 2023. And to achieve this, we analyze and help you understand the most popular forex pairs. We will tell you about the most volatile currency crosses and how they correlate with other currency pairs and financial assets.

We then look at the best brokerages to trade top currency pairs and go over the factors influencing forex prices.

Read on.

Top 10 Best Forex Pairs To Trade In 2023

Here is an outline of what we consider the best pairs to trade in forex in 2023. It is a blend of major, minor, and exotics whose popularity not only makes them deeply liquid but also affects their spreads.

EUR/USD - Best Forex Pair To Trade With Low Spreads
USD/JPY - Best Currency Pair With Deep Liquidity
GBP/USD - One Of The Most Traded Major Forex Pairs
USD/CAD - Deeply Liquid Forex Pair With Negative Correlation With Oil
USD/CHF - Best Forex Pair For Scalping
AUD/USD - Most Proffered Currency Pair For Commodity Traders
NZD/USD - Popular Forex Pair With Positive Correlation To AUD/USD
EUR/GBP - Popular Forex Pair With Positive Correlation To USD/JPY
GBP/JPY - One Of The Most Volatile Currency Cross For High-Risk Traders
EUR/JPY - Top Currency Cross With Positive Correlation To USD/JPY

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Below, we look at the features of these currency pairs. We also examine their liquidity, prices, and average spreads on major forex brokerages. We also check their price correction with other currency crosses and assets in the financial markets.

The Best Forex Currency Pairs To Trade Explained

In this section, we explore 10 of the most popular and most traded currency pairs. Note that the currencies listed below are massively volatile and deeply liquid. But with the volatility comes plenty of chances to make money regardless of the currency pair's price direction.

1. EUR/USD – Best Forex Pair to Trade With Low Spreads

One of the most popular and best pairs to trade in forex has to be the EUR/USD pair. It is also the most traded currency pair and has been listed with virtually all the largest and most popular forex brokerages. By pitting EUR against USD, this currency pair indicates how many US Dollars are needed to buy one Euro. And most recently, the pair was all over the news after the USD broke parity with EUR – for the first time in two decades.

At the time of writing, the EUR/USD pair is trading at 0.9639, implying that slightly less than $1 can be exchanged for €1.

There are a few key reasons why EUR/USD is considered one of the best crypto pairs to trade today. First, it is easily accessible as it is listed with all the major forex trading platforms. Secondly, the EUR/USD pair attracts extremely tight spreads on these brokerages. For example, the spreads for the pair on leading brokerages like Capital.com can be as low as 0.6 pips.

Additionally, EUR/USD's deep liquidity means that it is less volatile than most other currency crosses. This makes its price forecasting easier and makes it beginner friendlier.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

2. USD/JPY – Best Currency Pair With Deep Liquidity

Also known as 'The Gopher,' the USD/JPY is one of the currency pairs with the most trading volume and, thus, the best pair to trade in forex today. It pits the USD – the most traded currency in the world- against the Japanese Yen (JPY) – the most traded currency in Asia.

The USD/JPY pair shares most of the EUR/USD characteristics. For starters, it, too, is massively liquid and has been listed with arguably all the most popular forex brokerages in the world. This deep liquidity and popularity then afford it a few advantages, including relatively highly competitive spreads on these FX trading platforms – as low as 0.8 pips.

At the time of writing, the USD/JPY pair is trading at 144.460 - indicating that you need slightly over ¥144 to acquire $1.

Like EUR/USD, the USD/JPY pair is considered a 'stable' cross. This implies that even though it is more volatile than the EUR/USD pair, it is less volatile than the rest of the forex pairs.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

3. GBP/USD – One of the Most Traded Major Forex Pairs

Yet another popular currency pair on our list of best pairs to trade in forex has to be the GBP/USD. Pitting the pound sterling against the US dollar, it is the world's third most traded currency pair. Like most other popular currencies, it is massively liquid and has been listed with virtually all the major FX brokerages.

Colloquially known as the 'Cable,' the GBP/USD pair shares most of the features of its peers. These include the fact that it is relatively 'stable,' which means that its price action tends to agree with technical analysis. Not forgetting that it, too, attracts highly competitive spreads on most FX brokerages.

At the time of writing, for instance, the GBP/USD pair is trading for 1.0815 with spreads starting from 1 pip.

The cable is essentially a proxy for measuring the UK's health against that of the US. Economic, fiscal policy, and political news/events in either country often dramatically impact the price of either currency.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

4. USD/CAD – Deeply Liquid Forex Pair with Negative Correlation with Oil

Also known as the 'Loonie,' the USD/CAD currency cross ranks high on our index of best pairs to trade in forex. It pits the US dollar against the Canadian dollar, and it, too, is one of the most traded forex pairs. We must also mention that it is negatively correlated to oil because crude oil is one of Canada's largest foreign exchange-earners.

This implies that when the price of oil goes up, the value of the Canadian dollar rises. And since oil is typically traded in USD in the international markets, CAD value rises against the USD. Owing to the ongoing oil shortage orchestrated by the ongoing Russia-Ukraine war, oil prices have gone up sharply. Subsequently, USD/CAD values have rallied over the past few months.

At the time of writing, for instance, the USD/CAD is trading at 1.3650, a sharp increase from the lows of 1.2500 witnessed at the beginning of the year.

Loonie's popularity and deep liquidity ensure that it lists with virtually all the large FX brokerages. These also help keep USD/CAD spreads low.

We must, however, mention that given the large number of factors affecting the USD/CAD currency prices, it is considered highly volatile. Thus, it is only recommended to expert traders.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

5. USD/CHF – Best Forex Pair to Trade During Market Volatility

Still on our list of best currency pairs to trade in forex is the USD/CHF cross. Pitting the US Dollar against the Swiss Franc, the pair is considered relatively stable and a safe haven during volatile markets. Also known as the 'Swissie,' the pair borrows much of its characteristics from the Swiss finance industry that is considered the global safe haven.

The 'stable' and 'safe haven' features of the Swissie have their fair share of advantages and disadvantages. One of the benefits is that it helps currency traders preserve the value of their capital during periods of unprecedented market volatility. The downside to this is that it only posts substantial trading activity during such periods. This implies relatively low liquidity when the forex market is stable, which could translate to higher spreads.

These notwithstanding, several factors make the USD/CHF currency cross easy to trade. For starters, the fact that it remains one of the most traded crosses implies there is enough data to help with price analysis. It also respects technical analysis, which translates to high levels of predictability.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

6. AUD/USD – Most Preferred Currency Pair for Commodity Traders

Also known as 'Aussie,' the AUD/USD joins our list of best currency pairs with tight spreads. Like other USD-paired currencies, the AUD/USD currency cross is a proxy for estimating the strength of the Australian economy against that of the US.

At the time of writing, the AUD/USD is trading at 0.6495, implying that you need slightly above $0.6 to buy one Australian dollar.

We include it on this list because of its popularity, deep liquidity, and accessibility – owing to its listing with most FX brokerages across the world. We also include it easy to trade and respect technical analysis.

Like the Canadian dollar, Aussie's value is closely tied to the value of its imports. These include such raw materials as iron ore, copper, and coal. Rising demand for these commodities thrusts up the value of AUD and, by extension, the AUD/USD pair.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

7. NZD/USD – Popular Forex Pair with Positive Correlation to AUD/USD

The New Zealand forex market is always the first to open, making it the de-facto pace setter for the global FX industry. Currency traders are, therefore, always flocking the market, which translates to relatively high NZD/USD trading volumes. The fact that New Zealand is a large economy has also increased currency trader interest in NZD.

At the time of writing, the NZD/USD is trading at 0.5704, indicating that you need slightly over 50 cents in USD to acquire one NZD.

Several factors make NZD/USD one of the best pairs to trade in forex. For starters, it is relatively liquid – though there is an ongoing debate over whether it ought to be considered a 'major' or 'minor' currency pair. Secondly, it is massively popular, is relatively stable, is accessible, and attracts competitive spreads. All these, plus the predictability of its price, make NZD/USD one of the best trading pairs for intermediate to experienced investors.

We must add that the NZD/USD pair shares a lot of similarities with the AUD/USD. For starters, the two are positively correlated. Secondly, they are preferred by commodity traders, especially when you consider the fact that New Zealand is one of the leading exporters of dairy and animal products.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

8. EUR/GBP – Popular Forex Pair With Positive Correlation to USD/JPY

The EUR/GBP currency cross is one of the most popular minor FX pairs. By pitting the pound sterling against the Euro, it compares the economy and currency performance of the two most dominant markets in Europe, i.e., the UK and the European Union. Though the pair isn't as actively traded as the USD cross for either EUR or GBP, it still posts decent daily trading volumes.

Its popularity has helped it list on a majority of FX trading platforms. Its deep liquidity and relatively high daily trade volumes, on the other hand, help keep spreads at a minimum on most brokerages. We must, however, warn that the EUR/GBP cross is one of the most volatile fx pairs out there- making it unsuitable for beginner and intermediate traders.

At the time of writing, the EUR/GBP pair is trading at 0.8914, and its spreads on most exchanges start from 1.5 pips.

Note, however, that it is not uncommon for EUR/GBP currency prices to fluctuate by as much as 1.5% on a single day – especially post Brexit.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

9. GBP/JPY – One of the Most Volatile Currency Cross for High-Risk Traders

GBP/JPY is yet another massively popular minor currency cross and one of the best pairs to trade in forex. It tracks. It is the most popular of the non-USD paired currency crosses and lets you trade financial and economic news that doesn't necessarily affect the US.

One of its most distinguishing characteristics is uncontrollable and sporadic price volatility. This makes it unsuitable for beginner to intermediate and even risk-averse currency traders.

But the volatility notwithstanding, it still makes it to our list of best pairs to trade in forex – for high-risk traders. With volatility and high-risk tolerance comes the ability to make significant gains in either market direction.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

10. EUR/JPY – Top Currency Cross with Positive Correlation to the Equity Markets

Last on our list of best pairs to trade in forex is a leading minor exchange – the EUR/JPY currency cross. Like EUR/GBP and EUR/JPY, the pair that pits Euros against the Japanese Yen is relatively popular and has been listed with some of the most popular FX brokerages. Unlike the 'majors,' however, it is less popular and records relatively low liquidity.

The low popularity and equally low trade activity translate to relatively high spreads on most exchanges – averaging 2.0 pips. These make it unsuitable for risk-averse and beginner/intermediate forex traders.

Nevertheless, a few factors make EUR/JPY the best forex pair for experienced and high-risk tolerance fx traders. For starters, the highly volatile price action and ultra-wide price movements for the currencies present traders with opportunities for above-average gains. By taking advantage of this volatile price action, traders can make money regardless of the currency's price direction.

We must also observe that EUR/JPY positively correlates with stocks. You, therefore, can use it as a leading indicator for the global equity market. When the currency cross is on an uptrend, stocks follow closely.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Choosing A Currency Pair When Trading Forex

Before you can learn how to choose the best forex pair to trade, it is important that you first understand the difference between the three types of stocks. These are categorized as majors, minors, and exotics.

Majors

As the name suggests, 'Majors' refer to the most traded forex pairs. And while there is no standard for determining what fx pair makes it to the 'major' classification, the tag mainly applies to the following five currency pairs. These are:

EUR/USD
USD/JPY
GBP/USD
USD/CHF
AUD/USD

Some of the distinct features of majors include the fact that they are listed with virtually all the most popular FX exchanges. They are also relatively stable, deeply liquid, and attract rather tight spreads. Further, their low volatility and respect for technical analysis make them appealing to beginner and intermediate traders.

Minors

If a currency pair doesn't feature the US dollar, it is categorized among the 'Minor' currency pair. The most common minor currency pairs include:

EUR/GBP
EUR/AUD
NZD/JPY
AUD/NZD
GBP/JPY
CHF/JPY
GBP/CAD

Note that minors aren't as actively traded as the majors. They are also not as popular and are, therefore, not aggressively listed with top FX brokerages. All these have ensured that the minor currency pairs have a more erratic price action which translates to wider spreads.

Exotics

Exotics are a class of minor currency pairs, only that they refer to the currencies of emerging economies. They aren't as popular or actively traded as the majors or minors and include:

EUR/TRY
USD/HKD
GBP/ZAR
JPY/NOK
AUD/MXN
NZD/SGY

They have an even more erratic price action than minors. They are very illiquid and only listed on a handful of fx brokerages that maintain some of the widest spreads. This makes these currency pairs exorbitantly expensive to trade and unappealing to beginner and intermediate traders.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

What Are Some Of The Factors Affecting Currency Pair Prices?

Numerous fiscal, monetary, economic, and political factors affect the price of currency pairs. Here are the five most impactful:

Interest rates: Interest rates have a significant impact on the value of a currency and its dollar exchange rate. Higher interest rates often increase the value of a country's currency.
Inflation rates: Inflation is an indicator of a currency's purchasing power whereby low interests point to a strong and valuable currency. High inflation, on the other hand, points to a weakened currency and economy.
Major political news: Major political news and events like pronouncements by senior government officials or regime changes will have a significant on currency prices. Positive news and events help rev up the value of a currency and vice versa.
GDP figures: GDP is an indicator of the health of a country's economy. High commodity prices often affect the GDP negatively, leading to high inflation and a weakened currency.
Public debt: Overblown public debt is often a precursor of high inflation and a weakening economy, which have a negative effect on the value of the country's currency.

Where To Trade The Best Currency Pairs – Forex Brokerages With The Tightest Spreads

You now understand what major, minor, and exotic currency pairs are. You also know of the different factors affecting currency pair prices. We now need to understand the best places to trade these currencies.

If you want to start investing in forex, we recommend you consider using either of the following forex brokerages.

eToro – Best FX broker with copy trading tools

eToro is one of the most popular and reputable FX trading platforms. Launched in 2007, the brokerage has since extended its operations to 100+ countries and serves close to 30 million traders. It is also licensed and regulated by all top-tier financial regulatory agencies, including the FCA, FINRA, ASIC, CySEC, and FinCEN.

Some of its inviting features include a large collection of fx trading pairs – up to 49 major, minor, and exotic crosses. It also has one of the most straightforward trader onboarding processes and a highly intuitive trading interface. Additionally, it charges some of the most competitive spreads on all fx pairs, maintains one of the fastest transaction execution speeds, and doesn't charge commission for fx trades.

eToro also integrates the copy trading feature. This appeals to both beginner and pro-currency traders. It lets beginners make money by copying winning fx trading strategies from pro investors. On the other hand, expert traders earn a 20% commission on all the profits made from their copied trades.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Capital.com – AI-Powered trading platform with ultra-tight spreads

Capital.com is an equally popular and highly reputable forex brokerage. It, too, is licensed and regulated by virtually all the top-tier finance regulatory agencies in the world, including the FCA, FSA, CySEC, and ASIC.

The FX broker maintains one of the most straightforward account opening processes. This then extends into a highly intuitive and AI-powered trading interface. The artificial intelligence trading tool comes in handy in helping all traders detect bias and understand their trading behaviour better.

In addition to this, all of Capital.com's trading platforms feature a wide range of technical indicators, charting tools, price alerts, and client sentiments to help you become a smarter trader.

Some of Capital.com's other key features include a readily accessible support team – available online and on the phone. Not forgetting ultra-fast transaction processing speeds and some of the most competitive spreads on all currency pairs listed on the platform.

Conclusion – Best Pairs To Trade In Forex Today

There goes everything you need to know about the best currency pairs to trade in forex in 2023. Here, we have introduced you to what we consider the best major, minor, and exotic pairs to start trading right now. We have also outlined the key differences between the three categories of forex currencies and told you about the best forex trading platforms.

Want to start investing in forex today? Start by going through this guide again. Identify one or a couple of currencies worth trading, master a trading strategy, register an account with eToro or Capital.com, and start trading.

eToro – Best Place To Trade Forex

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

FAQs On The Best Currency Pairs To Trade Right Now

What is the best Currency to trade in Forex?

A number of factors make the EUR/USD pair the best currency pair to trade in 2023. These include the fact that it is relatively stable, attracts ultra-tight spreads, accessibility, and respect for technical analysis.

Which is the most valuable currency today?

Kuwaiti Dinar (KWD) is the strongest and most valuable currency in the world. It, however, falls under the exotic class of currency pairs as it records rather low trade volumes.