Why is EUR/USD the most preferred currency pair?

EUR/USD is the most popular currency pair. I want to know why is so.

Probably these reasons

1. Low spread - probably the lowest spread pair with most brokers
2. Highly liquid - lots of trading activity
3. Trendy pair - i.e. it can have sustained directional moves
4. Good volatility - it moves

Others may have more to add, but thats my 2c

Because they are the currencies of two of the world's largest economic trading powers, USA & Europe.

See here for details: http://www.investopedia.com/universi...#axzz1gVaAx2Pq

These are the effects resulting from the global trading of the two currencies rather than the cause of the pairs popularity.

Regards, Paul.

What are the implications?

If one or more of the less stable members (ie, Italy, Greece) pulls out first, will Euro go down? Already priced in?

If one or more of the stable members (ie, Germany, France) pulls out first, will Euro go up? Already priced in?

A complete blow-out and euro is abandoned? Where does it go before it is exchanged for new script?

If I knew that I would keep it to myself, make a fortune and retire on the proceeds.

Thanks to share investopedia source with us. It much helped me to understand behind popularity of EUR/USD.

I personally prefer EUR/JPY.

Is there any specific reason to trade with EUR/JPY?

Found an interesting answer after googling:

"Since most currencies are coupled with USD to make a pair, 50% of volatility of any pair is that of USD. So generally speaking, EURUSD, GBPUSD and USDJPY share the majority of moves.

As I've been observing, the economic indicators moves the price. So the more frequent the data is released, the more frequent the pair moves, in other word, the higher the volatility is.

EURUSD is the most volatile pair, because EUR is affected by more countries than other pairs. For instance, GBP is affected by only UK, and JPY is affected by Japan. Since it covers many countries, EUR got affected by every news released in Europe!

That's why you often see EURUSD is choppy or has broken trend while USDJPY and GBPUSD are having nice trend."


Other reasons to choose a currency:


A graph of a period just over a year shows that GBP/JPY is the most volatile pair with a decent volume.


For me, it's GBP/USD, even if EURUSD is the most popular and GBPJPY more volatile. For a short period a few years ago, I studied the former and it seemed to have at once a more-defined and -limited price range and more swings within that range. And, using the world's oldest currency, and thus the most experienced trader's market (and where Greenwich Mean Time is), along with the standard currency, seems appropriate.

Hi ha-pattern, Great thanks for your detailed reply. Shared reference match with your replies and it helped me to know the actual reason behind it.