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A pair of wires which carry equal and opposite currents are called balanced transmission lines. When current flows in a single wire in one direction, it creates a magnetic field around the wire and acts like a coil. This is called unbalanced and coaxial cable is an example.

With balanced transmissions lines, the current travelling in one direction cancels out the magnetic field produced by the current flowing in the other wire in the opposite direction. Each attempts to create a magnetic field in opposite directions around the transmission line and, since the currents are equal, the magnetic fields are exactly cancelled out and very little or no magnetic field is produced.

One big advantage of balanced transmission lines is the lack of what is called, "common mode" noise. Currents in wires not only produce magnetic fields, they are affected by them. Noise produced in one wire is produced equally in the other and the current and voltage difference between them remains the same.

Twisting the wires has little extra effect in free space but does help when the transmission lines come close to other wires and other metals. If the two wires were straight and one of them was close to a metal surface, there would be a greater capacitance between the wire closer to the surface changing the velocity factor of one wire and not the other. Twisting the wires balances out capacitive effects in such circumstances.

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