Woodside Capital, Inc.
Project Finance, Stocks & Options, Commodity, Forex, Futures, Binary Options

Understanding Currency Pairs and SWAP

The Majors

Most currency transactions involve the "Majors", consisting of the British Pound (GBP), Euro (EUR), Japanese Yen (JPY), Swiss Franc (CHF) and the US Dollar (USD). Whilst these are the key five currencies, the Canadian Dollar (CAD) and the Australian Dollar (AUD) are starting to be considered as additional 'major' currencies.

Currencies in Pairs

The logic for currency pairing, is that if we had a single currency alone, we would have no means to measure its relative value. By pairing two currencies against each other a fluctuating value can be established for one versus the other.

Currency Pairs that do not include the US dollar are commonly referred to as Cross Currency Pairs. Cross Currency trading can open a completely new aspect of the Forex market to speculators. Some cross currencies move very slowly and trend very well. Other cross currency pairs move very quickly and are extremely volatile with daily average movements exceeding 100 pips

The SWAP

When we execute a Forex transaction, we essentially borrow one currency and lend another. This borrowing and lending is like any other banking transaction and therefore subject to interest rates. The interest is referred to as the SWAP rate in the currency markets. The Swap is a credit or debit as a result of daily interest rates. When traders hold positions overnight, they are either credited or debited interest based on the rates at the time.

Currency Pairs and Spreads

WCI offers investors and traders competitive spreads for the following currency pairs.
The table below is the spreads during normal market conditions:

 

Forex Symbol

Currency Pairs

Spreads

 

AUD/CAD

Australian Dollar / Canadian Dollar

6

pips

AUD/CHF

Australian Dollar / Swiss Franc

5

pips

AUD/JPY

Australian Dollar / Japanese Yen

5

pips

AUD/NZD

Australian Dollar / New Zealand Dollar

10

pips

AUD/USD

Australian Dollar / U.S. Dollar

3

pips

CAD/CHF

Canadian Dollar / Swiss Franc

10

pips

CAD/JPY

Canadian Dollar / Japanese Yen

9

pips

CHF/JPY

Swiss Franc / Japanese Yen

8

pips

EUR/AUD

Euro / Australian Dollar

12

pips

EUR/GBP

Euro / British Pound

5

pips

EUR/CAD

Euro / Canadian Dollar

9

pips

EUR/JPY

Euro / Japanese Yen

3.5

pips

EUR/NZD

Euro / New Zealand Dollar

25

pips

EUR/CHF

Euro / Swiss Franc

3

pips

EUR/USD

Euro / U.S. Dollar

2.1

pips

GBP/AUD

British Pound / Australian Dollar

10

pips

GBP/CAD

British Pound / Canadian Dollar

10.8

pips

GBP/CHF

British Pound / Swiss Franc

6.8

pips

GBP/JPY

British Pound / Japanese Yen

6

pips

GBP/NZD

British Pound / New Zealand Dollar

30

pips

GBP/USD

British Pound / U.S. Dollar

4

pips

NZD/JPY

New Zealand Dollar / Japanese Yen

6

pips

NZD/USD

New Zealand Dollar / U.S. Dollar

5

pips

NZD/CAD

New Zealand Dollar / Canadian Dollar

10

pips

NZD/CHF

New Zealand Dollar / Swiss Franc

10

pips

USD/CAD

U.S. Dollar / Canadian Dollar

5

pips

USD/CHF

U.S. Dollar / Swiss Franc

3.8

pips

USD/JPY

U.S. Dollar / Japanese Yen

3

pips

 

While we strive to display fixed price spreads at all times, there may be occasions, however rare, where a significant market or world event may force us to widen spreads without prior notice to our clients.

 
 

 

RISK WARNING: Trading in Forex and Contracts for Difference (CFDs), which are leveraged products, is highly speculative and involves substantial risk of loss. It is possible to lose more than the initial capital invested. Therefore, Forex and CFDs may not be suitable for all investors. Only invest with money you can afford to lose. So please ensure that you fully understand the risks involved. Seek independent advice if necessary.