Community Forex Questions
What are the major types of cross currency pairs?
In forex, cross-currency pairs are those that do not involve the US dollar. They are widely used by traders who want to bypass the dollar and directly trade two non-USD currencies. These pairs are divided into several major categories, each offering different opportunities and risks.
The first type is the major crosses, which involve the most traded currencies after the US dollar, such as the euro (EUR), British pound (GBP), and Japanese yen (JPY). Examples include EUR/GBP, GBP/JPY, and EUR/JPY. These pairs usually have high liquidity and tighter spreads, making them attractive for active traders.
The second type is the commodity crosses, where currencies are linked to resource-driven economies. Popular examples include AUD/JPY, CAD/JPY, and NZD/JPY. These pairs are influenced by commodity prices like oil, gold, and agricultural products, creating opportunities for traders who follow global resource markets.
The third type is the minor crosses, which involve smaller but still actively traded currencies, such as EUR/CHF, GBP/CHF, or EUR/AUD. They generally have lower liquidity than the major crosses but still attract significant trading volume.
Finally, there are exotic crosses, which include a major currency paired with a currency from a developing or smaller economy, such as EUR/TRY or GBP/ZAR. These pairs can be highly volatile, with wider spreads, offering both higher risk and reward.
Together, these cross-currency pairs expand trading possibilities beyond dollar-centred markets.
The first type is the major crosses, which involve the most traded currencies after the US dollar, such as the euro (EUR), British pound (GBP), and Japanese yen (JPY). Examples include EUR/GBP, GBP/JPY, and EUR/JPY. These pairs usually have high liquidity and tighter spreads, making them attractive for active traders.
The second type is the commodity crosses, where currencies are linked to resource-driven economies. Popular examples include AUD/JPY, CAD/JPY, and NZD/JPY. These pairs are influenced by commodity prices like oil, gold, and agricultural products, creating opportunities for traders who follow global resource markets.
The third type is the minor crosses, which involve smaller but still actively traded currencies, such as EUR/CHF, GBP/CHF, or EUR/AUD. They generally have lower liquidity than the major crosses but still attract significant trading volume.
Finally, there are exotic crosses, which include a major currency paired with a currency from a developing or smaller economy, such as EUR/TRY or GBP/ZAR. These pairs can be highly volatile, with wider spreads, offering both higher risk and reward.
Together, these cross-currency pairs expand trading possibilities beyond dollar-centred markets.
Cross-currency pairs are forex pairs that do not include the US dollar. They are popular among traders seeking opportunities outside the dollar’s influence. Major types of cross-currency pairs are generally divided into three groups. Major crosses involve combinations of the world’s strongest currencies, such as EUR/GBP, EUR/JPY, and GBP/JPY. These pairs are liquid and widely traded. Minor crosses include pairs from developed economies but with lower trading volumes, such as AUD/JPY, NZD/CHF, or CAD/JPY. They offer opportunities but often come with wider spreads. Exotic crosses combine a strong currency with one from an emerging market, like EUR/TRY or GBP/ZAR. These pairs are riskier due to volatility and lower liquidity. Each type suits different trading strategies depending on risk tolerance and market conditions.
Davidhussay
Sep 15, 2025 05:41
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Sep 11, 2025 02:59