How do you determine the liquidity of a currency pair?

[Potuse]

Irrespective of the fact that forex is the largest liquid market . It is important to understand the liquidity of a particular currency pair before taking any position and that is why you should look at some factors to determine the liquidity of a currency pair and a typical example is the volume of trade.

 

[Planbizzle]

The liquidity of a currency pair is determined by its trading activity and the narrowness of its bid-ask spread. A pair of currencies is deemed liquid when it can be easily purchased and sold without triggering significant fluctuations in its exchange rate.