Major Cross-Currency Pairs.

What are major cross-currency pairs?  Currency pairs that include any two of the major currencies are except the U.S. dollar are known as cross-currency pairs or simply as the “crosses.”

Major crosses are also known as “minors.”

While not as frequently traded as the majors, the crosses are still pretty liquid and still provide plenty of trading opportunities.

Don’t confuse minor currency pairs with the seven major currency pairs, all of which include the U. S. dollar against one of the six other most liquid currencies in the world.

The most actively traded crosses are derived from the three major non-USD currencies: EUR, JPY, and GBP.

Euro Crosses

Yen Crosses

Pound Crosses

Other Crosses

Exotic Currency Pairs

An exotic currency is a currency from countries with developing or emerging markets.

Exotic currency pairs are made up of one major currency paired with the currency of an emerging economy, such as Brazil, Mexico, Chile, Turkey, or Hungary.

Basically, an exotic currency pair includes one major currency alongside an exotic currency. 

The chart below contains a few examples of exotic currency pairs.

Depending on your forex broker, you may see the following exotic currency pairs so it’s good to know what they are.

Keep in mind that these pairs aren’t as heavily traded as the “majors” or “crosses,” so the transaction costs associated with trading these pairs are usually bigger.

It’s not unusual to see spreads that are two or three times bigger than that of EUR/USD or USD/JPY.

Due to the overall lower degree of liquidity, exotic currency pairs tend to be far more sensitive to economic and geopolitical events.

For example, a political scandal or unexpected election results can cause an exotic pair’s exchange rate to swing violently.

So if you want to trade exotics currency pairs, remember to factor this in your decision.

For those of y’all who are really mesmerized by exotics, here’s a more comprehensive list.

More Exotic Pairs

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