Understanding the G10 Currencies: A Guide to the World’s Most Traded Currencies

Bizphire February 18, 2025

The foreign exchange (FX) market is the largest and most liquid financial market in the world, with daily trading volume surpassing $6 trillion. Among the myriad of currencies traded globally, a select group holds more significance than others — the G10 currencies. These currencies are highly liquid, widely traded, and often seen as benchmarks for international currency exchange. In this article, we’ll explore what the G10 currencies are, why they matter, and how they impact the global economy.

What Are G10 Currencies?

The G10 (Group of Ten) refers to a group of the world’s most prominent economies, and the currencies of these nations are considered the most stable and liquid in the global market. These ten currencies represent a large share of global trade and are often seen as safe havens in times of economic uncertainty.

The G10 currencies are as follows:

US Dollar (USD)
Euro (EUR)
Japanese Yen (JPY)
British Pound Sterling (GBP)
Canadian Dollar (CAD)
Swedish Krona (SEK)
Swiss Franc (CHF)
Australian Dollar (AUD)
New Zealand Dollar (NZD)
Norwegian Krone (NOK)

Although the G10 originally referred to a group of countries, today, the term is often used to describe the currencies themselves rather than the countries. These currencies are heavily traded due to their widespread use in international business, trade, and investment.

Why Are G10 Currencies Important?

Liquidity and Stability: The G10 currencies are among the most liquid and stable in the world. This means that they are less prone to sudden, extreme price fluctuations compared to currencies from emerging or smaller economies. The liquidity of these currencies also ensures that they can be traded quickly and efficiently, making them attractive to both institutional and retail investors.
Global Trade and Reserve Currency: Many of the G10 currencies are central to international trade and finance. The US Dollar (USD), for example, is the world’s primary reserve currency and is used in most global transactions. The Euro (EUR) and the British Pound (GBP) are similarly important in European trade and beyond.
Safe-Haven Assets: In times of global economic uncertainty or geopolitical tensions, investors tend to flock to the G10 currencies as a store of value. The Swiss Franc (CHF) and the Japanese Yen (JPY), in particular, are often seen as “safe-haven” currencies, meaning that they tend to appreciate during times of market turmoil as investors seek safety.
Interest Rates and Monetary Policy: The central banks of the G10 countries, including the Federal Reserve (US), the European Central Bank (ECB), and the Bank of Japan (BoJ), have significant influence on global financial markets through their control over interest rates and monetary policy. Decisions made by these central banks can have a profound impact on currency values, influencing everything from inflation to employment and economic growth.

Key Characteristics of the G10 Currencies

Each of the G10 currencies has its own unique characteristics, often shaped by the economic conditions and policies of the country that issues it. Let’s take a closer look at the main currencies in the G10 group:

US Dollar (USD): The US Dollar is the most traded currency in the world and serves as the global reserve currency. It is the standard currency for international trade and is used in the pricing of commodities like oil and gold. The USD is highly influenced by the policies of the Federal Reserve and global events such as geopolitical tensions and economic crises.
Euro (EUR): The Euro is the official currency of the Eurozone, which comprises 19 of the 27 European Union (EU) member countries. As the second most traded currency in the world, the Euro is crucial to global trade and investment. It is heavily influenced by the European Central Bank’s monetary policy and the economic performance of the EU member states.
Japanese Yen (JPY): The Japanese Yen is the most traded currency in Asia and the third most traded in the world. The Yen is often seen as a safe-haven currency, with its value tending to rise during times of global uncertainty. It is also closely linked to Japan’s export-driven economy and is highly sensitive to shifts in global trade.
British Pound Sterling (GBP): The British Pound, also known as “the Pound” or “Sterling,” is the official currency of the United Kingdom. It is one of the oldest currencies still in use and remains a key player in global trade. The Pound is sensitive to political and economic events in the UK, particularly those related to Brexit, the UK’s exit from the European Union.
Canadian Dollar (CAD): The Canadian Dollar is closely tied to global commodity prices, especially oil, as Canada is a major oil exporter. When oil prices rise, the CAD typically strengthens, and vice versa. The Bank of Canada’s monetary policy also plays a crucial role in influencing the value of the Canadian Dollar.
Swedish Krona (SEK): The Swedish Krona is the official currency of Sweden. Though smaller in comparison to the USD or EUR, the Krona is a significant currency in European trade. It is often influenced by Sweden’s economic policies and is known for its volatility due to the country’s relatively small, export-driven economy.
Swiss Franc (CHF): The Swiss Franc is known for its stability and is considered a safe-haven currency, particularly during times of global instability. Switzerland’s neutral political stance, robust economy, and low inflation contribute to the Franc’s appeal. It is also widely used in global banking and wealth management.
Australian Dollar (AUD): The Australian Dollar is often linked to the performance of the commodity markets, particularly metals and minerals, as Australia is a major exporter of natural resources. The AUD is also influenced by global risk sentiment, with the currency rising during times of global economic optimism and falling during periods of uncertainty.
New Zealand Dollar (NZD): Like the Australian Dollar, the New Zealand Dollar is a commodity-linked currency, heavily influenced by exports like dairy products, meat, and wool. The NZD is more volatile compared to other G10 currencies and tends to be more sensitive to shifts in global economic sentiment.
Norwegian Krone (NOK): The Norwegian Krone is closely linked to the price of oil, as Norway is one of the world’s largest oil exporters. The value of the Krone tends to rise when oil prices are high and fall when they are low, making the currency sensitive to global oil market fluctuations.

How Do G10 Currencies Impact Global Markets?

G10 currencies play a crucial role in shaping global economic and financial landscapes. They are used as benchmarks for pricing commodities, measuring inflation, and facilitating international trade. Currency movements of these ten currencies are often the result of economic data releases, central bank policies, geopolitical events, and market sentiment.

For traders, the G10 currencies offer both opportunities and risks. Due to their liquidity and stability, they are favored by institutional and retail investors alike. Traders can capitalize on fluctuations in these currencies through a variety of strategies, including technical and fundamental analysis, as well as trading news events and interest rate decisions.

Conclusion

The G10 currencies represent the backbone of global trade, investment, and finance. From the US Dollar to the Norwegian Krone, each of these currencies has its own unique characteristics and economic drivers. For anyone involved in the foreign exchange market, understanding these currencies is essential to developing a successful trading strategy. Whether you’re a beginner or an experienced trader, the G10 currencies provide opportunities for diversification, risk management, and profit, but they also require careful analysis and attention to global economic events.