The dollar and its closest few:the majors trade the tightest too.
The most heavily traded currency pairs in the forex market, all including the US dollar: EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, USD/CAD, and NZD/USD.
In plain words
The major pairs are the most heavily traded currency pairs, and each of them has the US dollar on one side. By the usual convention there are seven: EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, USD/CAD and NZD/USD.
See it move
USD and EUR
Why it matters
Because so much business passes through them, the majors are generally the most liquid pairs, which tends to mean narrower spreads than on less traded pairs. The list is a market convention, and some sources use a shorter one.
Worked example
An example only. The figures are round and invented for the arithmetic: they are not market prices.
Three pairs are sorted by the usual convention: EUR/USD, EUR/GBP and USD/JPY.
- 1EUR/USDincludes the US dollar and is on the list, so it is a major
- 2EUR/GBPhas no US dollar, so it is a minor, also called a cross
- 3USD/JPYincludes the US dollar and is on the list, so it is a major
Two of the three are majors; the test is whether the pair is one of the heavily traded dollar pairs.
A common mistake
Not every pair containing the US dollar is a major. A pair such as USD/TRY has the dollar on one side but is classed as an exotic, because the other currency is far less traded.
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Educational information, not investment advice or a recommendation to trade.