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Dollar pair

Any pair with the US dollar on one side, as opposed to a cross; these carry the deepest liquidity and the tightest spreads.

Roughly nine out of ten forex trades have a dollar leg, because the dollar is the vehicle currency that connects everything else. A Thai importer paying a Chilean exporter will usually go through dollars rather than trading baht against pesos directly.

For a retail trader the practical consequence is cost. Dollar pairs such as those in major-pairs quote inside a pip during active hours, while a cross-rate built from two of them inherits both spreads.

Example: EUR/USD shows 0.2 pips of spread and GBP/USD 0.5 pips at the same moment, while EUR/GBP shows 1.1 pips. On a standard-lot round trip that is roughly $2, $5 and $11 respectively.

Related: cross-rate, major-pairs

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