2023-06-15
The term G7 currencies often creates confusion. Some readers think it means the seven most traded currencies in the world. Others assume it must include every country that belongs to the Group of Seven. Both ideas are partly true and partly wrong. In reality, the answer is simpler but also more interesting once you understand how finance and trading use these terms.
This article explains in plain words what the G7 is, which currencies belong to it, why traders sometimes mean something different when they talk about G7 currencies, and how these currencies shape the global economy. By the end, you will know the exact list, the reason behind the confusion, and how these currencies affect trading and everyday markets.
The G7 is short for the Group of Seven. It is a political and economic forum made up of the United States, the United Kingdom, Canada, Japan, France, Germany and Italy. These are some of the largest and most advanced economies in the world. The group was formed in the 1970s to allow leaders and finance ministers to coordinate on global economic policy.
The G7 does not have a headquarters or a permanent office. Each year one of the member countries takes the presidency and hosts the annual summit. At these meetings, leaders discuss issues such as global growth, financial stability, climate change, and world security. Because the countries are powerful both politically and economically, their collective decisions can influence markets worldwide.
Each G7 member has its own currency, although three of them share one. The full list looks like this:
United States: US dollar (USD)
United Kingdom: British pound (GBP)
Canada: Canadian dollar (CAD)
Japan: Japanese yen (JPY)
France: Euro (EUR)
Germany: Euro (EUR)
Italy: Euro (EUR)
That means the G7 covers five unique currency codes: USD, GBP, CAD, JPY, and EUR. When someone asks what the G7 currencies are in the official sense, this is the correct list.
In trading conversations you will often see people say G7 currencies when they are not referring to this official list. Instead, they mean the seven most traded currencies in the foreign exchange market. This group is usually:
US dollar (USD)
Euro (EUR)
British pound (GBP)
Australian dollar (AUD)
Swiss franc (CHF)
This is why you may come across lists that include the Australian dollar and the Swiss franc even though Australia and Switzerland are not members of the G7. Traders use this short form because these seven currencies dominate global trading.
So it is important to ask what someone means. If they are talking about the G7 as countries, then the official list applies. If they are discussing trading pairs and liquidity, they may be using the market shorthand.
Here is a quick look at the five official G7 currencies and two additional majors that traders often include.
The dollar is the world’s reserve currency. It is used in around nine out of ten forex transactions. Commodities like oil and gold are priced in dollars, which makes it the anchor of the global system.
The euro is shared by many countries in Europe including three G7 members. It is the second most traded currency. It represents integration and stability in Europe but can also reflect political challenges inside the region.
The yen is known as a safe haven currency. In times of global stress investors often move money into yen. For decades Japan has had very low interest rates, which also makes the yen important in carry trades.
British pound (GBP):
Sterling is one of the oldest currencies still in use. It is highly liquid and reacts strongly to Bank of England decisions and UK economic data.
Often called the loonie, the Canadian dollar is closely linked to oil and other commodities. When energy prices rise or fall, CAD often moves in the same direction.
While not a G7 currency, the Aussie is a major player in forex. It is tied to metals and other exports, and it reacts to economic news from China because of trade links.
Another non G7 member but widely traded. The franc is considered one of the safest currencies thanks to Switzerland’s stability. It often gains value during global crises.
In forex you always trade currencies in pairs. For G7 currencies the most important pairs are:
EUR/USD
USD/JPY
GBP/USD
USD/CAD
Cross pairs without the dollar also matter, for example EUR/GBP or EUR/JPY.
If you expand to the seven majors group, you also add AUD/USD and USD/CHF, plus their crosses. These pairs make up the majority of daily forex volume.
G7 currencies are not just symbols. They have real power in world markets. Central banks hold them as reserves. Global trade contracts are written in them. Commodity prices are set using them.
When the US Federal Reserve, the European Central Bank, the Bank of Japan, or the Bank of England change policy, it does not only affect their own economies. It moves global money flows. This is why traders, businesses, and even governments pay close attention.
At times the G7 has acted directly on currency matters. The most famous case was the Plaza Accord in 1985, where G5 nations agreed to weaken the dollar. While coordinated interventions are rare today, statements from G7 finance ministers can still move exchange rates.
The annual G7 summit also sets the tone for economic cooperation. Even if currencies are not the headline topic, markets listen for clues on how leaders view growth, debt, and inflation.
Besides G7 and majors, finance often uses other “G” labels.
G3 usually means USD, EUR, and JPY, the three largest trading currencies.
G5 sometimes refers to the US, UK, France, Germany, and Japan, though definitions vary.
G10 is a common trading set that adds currencies like AUD, NZD, SEK, and NOK.
G20 refers to a broader group of large economies including China, India, Brazil, and others, with their own currencies like CNY, INR, and BRL.
Some people think there are seven unique G7 currencies, but because three members share the euro, there are actually five.
Others believe AUD and CHF are official G7 currencies. They are not, but they are part of the major trading set.
Many beginners forget how strongly commodity currencies like CAD and AUD can move with oil and metals.
If you are new to trading, focus on the most liquid and well covered pairs first. EUR/USD and USD/JPY are good starting points. As you gain confidence, you can add GBP/USD and USD/CAD.
Keep in mind that each currency reacts to different drivers. Follow central bank announcements, economic calendars, and commodity prices. Start simple, trade small, and build up gradually.
USD, GBP, CAD, JPY, and EUR for France, Germany, and Italy.
Because traders use the term G7 loosely to mean the seven most traded currencies.
EUR/USD, USD/JPY, GBP/USD, and USD/CAD are the most liquid.
The G7 covers seven advanced economies, while the G20 includes a larger set of 19 countries plus the EU, including emerging markets like China, India, and Brazil.
Yes, coordinated statements or policy signals can move currencies, even if direct interventions are rare.
The phrase G7 currencies can mean two different things. In the official sense it refers to the currencies of the United States, United Kingdom, Canada, Japan, France, Germany, and Italy. That gives us five unique currency codes: USD, GBP, CAD, JPY, and EUR. In trading slang it often points to the seven major currencies: USD, EUR, JPY, GBP, AUD, CAD, and CHF.
Knowing the difference matters. It clears up confusion and helps you understand both political discussions at G7 meetings and the way traders talk about major forex pairs. With this clear picture, you can follow news, trading education, and global events with confidence and avoid the traps of mixed definitions.
