Currencies, like stocks and bonds, have pairs that are highly liquid and others are not. The most liquid currencies are often the political economies and the most stable. This includes the countries that form the Group of Seven (or G7): The United States, Japan, Britain, France, Germany, Italy and Canada.

Since the unification of European currencies by the euro, the currencies that are most liquid now is the dollar, Japanese yen, pound sterling, euro and Canadian dollar. It is estimated that the activity on these currencies account for more than 80% of daily volume on the Forex.

Liquidity is a key factor when you trade currencies. The currency pairs are generally illiquid spread bid / ask more important and more likely to have conditions of very fast movements because of the lack of liquidity and finally, are more likely to suffer from market manipulation.

The liquid currency pairs such as EUR / USD, USD / JPY, GBP / USD and USD / CAD have a very high level of liquidity, which in most cases, protects the trader spreads unfavorable conditions where liquidity is lacking. However, there are some conditions where even the most liquid currency pairs is very low liquid. The graph below shows the evolution of the EUR / USD over period of time just hours before the euro has evolved from a high to a low at 1.4365 to 1.3925.