Top 10 Most Traded Currencies in the World

The foreign exchange market is the largest financial market on the planet, with daily trading volumes exceeding $7.5 trillion. While there are more than 180 currencies recognized worldwide, a small handful dominates global trade and investment. Understanding these major currencies helps you make better decisions when exchanging money, investing internationally, or simply following the global economy.

Here is a detailed look at the top 10 most traded currencies in the world, ranked by their share of daily forex turnover.

1. United States Dollar (USD)

The US dollar is the undisputed king of the forex market. It is involved in approximately 88% of all forex transactions, making it the most traded currency by a massive margin. The dollar serves as the world's primary reserve currency, meaning central banks around the globe hold significant portions of their reserves in USD.

Several factors underpin the dollar's dominance:

The size and stability of the US economy
The depth and liquidity of US financial markets
The dollar's role as the standard currency for commodities like oil and gold
Trust in US institutions and rule of law

Nearly every major currency pair includes the dollar, and it serves as the default intermediary currency for many cross-border transactions.

2. Euro (EUR)

The euro is the second most traded currency, involved in about 31% of all forex transactions. Introduced in 1999 and now used by 20 European Union member states, the euro represents the combined economic power of the eurozone, which is one of the largest economic blocs in the world.

The EUR/USD pair is the single most traded currency pair, accounting for roughly 23% of total forex volume. The euro is also a major reserve currency, held by central banks worldwide as a diversification tool alongside the dollar.

Key Drivers

European Central Bank (ECB) monetary policy
Eurozone economic performance and inflation data
Political developments within EU member states

3. Japanese Yen (JPY)

The Japanese yen is the third most traded currency, appearing in about 17% of forex transactions. Japan has the third-largest economy in the world, and the yen plays a crucial role in Asian financial markets.

The yen is also known as a "safe-haven" currency. During times of global economic uncertainty or market turmoil, investors tend to buy yen, causing it to appreciate. This behavior stems from Japan's large current account surplus and its position as a major creditor nation.

The Carry Trade

The yen is frequently used in carry trades, where investors borrow in low-interest-rate currencies (like the yen) and invest in higher-yielding assets. This dynamic can cause significant yen volatility when global risk sentiment shifts.

4. British Pound Sterling (GBP)

The British pound is the fourth most traded currency, involved in roughly 13% of forex transactions. It is one of the oldest currencies still in use and remains a symbol of the United Kingdom's historical role in global finance.

London is the world's largest forex trading center, handling approximately 38% of global daily turnover. This geographic advantage reinforces the pound's prominence in currency markets.

Post-Brexit Dynamics

Since the UK's departure from the European Union, the pound has experienced increased volatility as markets adjust to new trade relationships and economic arrangements. GBP/USD, known as "Cable" among traders, remains one of the most actively traded pairs.

5. Chinese Renminbi (CNY/CNH)

The Chinese renminbi has risen rapidly in the forex rankings, now involved in about 7% of all transactions. China's emergence as the world's second-largest economy has driven demand for its currency in trade and investment.

There are two versions of the renminbi:

CNY: The onshore yuan, traded within mainland China under a managed float system.
CNH: The offshore yuan, traded freely in international markets, primarily in Hong Kong.

While the renminbi's share is growing, capital controls and government management of the exchange rate have limited its full potential as a freely traded currency.

6. Australian Dollar (AUD)

The Australian dollar accounts for about 6.5% of forex turnover. Australia's economy is heavily tied to commodity exports, particularly iron ore, coal, and natural gas, making the AUD a popular "commodity currency."

The AUD's value is closely linked to commodity prices and trade relationships with China, Australia's largest trading partner. When commodity prices rise and Chinese demand is strong, the Australian dollar tends to appreciate.

Popular Trading Pairs

AUD/USD is one of the most actively traded pairs, and AUD/JPY is popular among carry traders due to historically higher Australian interest rates compared to Japan.

7. Canadian Dollar (CAD)

The Canadian dollar, often called the "loonie" after the loon bird depicted on the one-dollar coin, represents about 6.2% of forex transactions. Like Australia, Canada is a major commodity exporter, with oil being particularly important.

The USD/CAD pair is heavily influenced by crude oil prices. When oil prices rise, the Canadian dollar tends to strengthen. The close economic relationship between Canada and the United States also makes this pair sensitive to North American economic data.

8. Swiss Franc (CHF)

The Swiss franc accounts for roughly 5% of forex trading volume. Switzerland's reputation for political neutrality, financial stability, and strong banking institutions makes the franc another popular safe-haven currency.

During periods of global uncertainty, the franc tends to appreciate as investors seek safety. The Swiss National Bank (SNB) has occasionally intervened in markets to prevent excessive franc appreciation, which can harm Swiss exporters.

The EUR/CHF Connection

Given Switzerland's geographic and economic proximity to the eurozone, the EUR/CHF pair is closely watched. The SNB famously maintained a floor on EUR/CHF at 1.20 from 2011 to 2015, and its sudden removal caused massive market disruption.

9. Hong Kong Dollar (HKD)

The Hong Kong dollar represents about 2.4% of global forex transactions. Hong Kong operates a linked exchange rate system, pegging the HKD to the USD within a narrow band of 7.75 to 7.85 HKD per USD.

Hong Kong's role as a major international financial hub, gateway to Chinese markets, and center for Asian finance drives significant trading volume in the HKD. The peg has been maintained since 1983 and is backed by substantial foreign exchange reserves.

10. Singapore Dollar (SGD)

The Singapore dollar rounds out the top ten, accounting for approximately 2.2% of forex turnover. Singapore is a major financial center in Asia, and the Monetary Authority of Singapore (MAS) manages the currency using a unique exchange rate-based monetary policy.

Rather than setting interest rates, MAS adjusts the slope, width, and center of an exchange rate band within which the SGD trades against a basket of currencies. This approach reflects Singapore's highly open, trade-dependent economy.

Why These Currencies Dominate

Several common factors explain why these ten currencies dominate global forex trading:

Economic size: The countries behind these currencies represent a large share of global GDP.
Trade volume: These nations are among the world's largest importers and exporters.
Financial market depth: Deep, liquid capital markets attract international investors.
Institutional stability: Strong legal systems, independent central banks, and transparent governance build trust.
Reserve currency status: Currencies held by central banks as reserves naturally see higher trading volumes.

What This Means for You

When you use a currency converter to check exchange rates, you are most likely converting between these major currencies. Because they are so heavily traded, major currency pairs typically have tighter spreads and lower conversion costs compared to exotic currencies from smaller economies.

If you regularly exchange money, understanding which currencies are most liquid can help you time conversions better and choose the most cost-effective exchange channels. Major currency pairs are available on virtually every exchange platform, giving you more options and better rates.

Conclusion

The global forex market may feature hundreds of currencies, but these ten dominate the landscape. From the almighty US dollar to the rising Chinese renminbi, each currency tells the story of its nation's economy, trade relationships, and role in the global financial system. Understanding these currencies gives you a stronger foundation for making informed decisions about currency exchange, international investment, and global finance.