Community Forex Questions
What is the difference between major, minor, and exotic pairs?
Major pairs are the most widely traded in the world and always include the U.S. dollar (USD) along with another strong currency such as the euro (EUR), British pound (GBP), Japanese yen (JPY), Swiss franc (CHF), Australian dollar (AUD), Canadian dollar (CAD), or New Zealand dollar (NZD). Examples include EUR/USD, GBP/USD, and USD/JPY. These pairs are highly liquid, meaning they have tight spreads and lower transaction costs, making them attractive to most traders.
Minor pairs are currency pairs that do not involve the U.S. dollar but include other major currencies. Examples are EUR/GBP, EUR/AUD, and GBP/JPY. While still liquid, they typically have wider spreads than major pairs because they are traded less frequently. Minors are useful for traders who want to speculate on the relative strength between two non-USD currencies.
Exotic pairs consist of one major currency paired with a currency from a smaller or emerging economy, such as USD/TRY (Turkish lira), USD/ZAR (South African rand), or EUR/THB (Thai baht). These pairs tend to have low liquidity, much wider spreads, and higher volatility. They can offer large opportunities but carry greater risks due to unpredictable price movements and limited market depth.
In summary, majors offer stability and liquidity, minors provide diversification, and exotics present high-risk, high-reward scenarios.
Minor pairs are currency pairs that do not involve the U.S. dollar but include other major currencies. Examples are EUR/GBP, EUR/AUD, and GBP/JPY. While still liquid, they typically have wider spreads than major pairs because they are traded less frequently. Minors are useful for traders who want to speculate on the relative strength between two non-USD currencies.
Exotic pairs consist of one major currency paired with a currency from a smaller or emerging economy, such as USD/TRY (Turkish lira), USD/ZAR (South African rand), or EUR/THB (Thai baht). These pairs tend to have low liquidity, much wider spreads, and higher volatility. They can offer large opportunities but carry greater risks due to unpredictable price movements and limited market depth.
In summary, majors offer stability and liquidity, minors provide diversification, and exotics present high-risk, high-reward scenarios.
In forex, currency pairs are grouped into major, minor, and exotic pairs. Major pairs are the most traded and always include the US dollar on one side, such as EUR/USD, GBP/USD, and USD/JPY. They have high liquidity, tight spreads, and lower volatility, making them attractive to most traders. Minor pairs, also called cross-currency pairs, don’t include the US dollar but involve other major currencies like EUR/GBP or AUD/JPY. They are still fairly liquid but usually have slightly wider spreads than majors. Exotic pairs combine one major currency with a currency from a smaller or emerging economy, such as USD/TRY or EUR/THB. These pairs tend to have low liquidity, wider spreads, and higher volatility, which makes them riskier but potentially more rewarding.
Aug 19, 2025 02:40