Major currency pair

By convention, a currency pair carrying the US dollar on one side and one of a small group of heavily traded currencies on the other, conventionally the euro, the yen, sterling and the Swiss franc, usually with the Canadian, Australian and New Zealand dollars added. The boundary is a market convention rather than a classification, and desks disagree about that second group.

The category earns its name from turnover rather than from any quality of the currencies themselves. The pairs in it account for the bulk of foreign exchange volume, which is why quoted liquidity sits deepest there, why the bid-ask spread on them is typically the narrowest a provider quotes, and why they keep quoting through more of the twenty four hour cycle than thinner pairs do. None of that is guaranteed by the label: a major widens like anything else around a scheduled release or in a thin session.

Two boundary questions come up repeatedly. A pair with no dollar on either side is a cross rate however heavily it trades, so euro against sterling is not a major under the dollar rule even though it is more liquid than several pairs that are. And the extended group, the Canadian, Australian and New Zealand dollars, is included by most desks and excluded by some, which is why one broker's major list and another's do not match. The lists are marketing categories built on a market habit, and neither is authoritative.