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Discussion Topic: Majors, Minors, Exotics
Today, we are going to talk about categories of Currency Pairs according to their Base and Quote currencies. Here you would learn the details about: What are Major Currency Pairs (or Forex Major Pairs, Majors), Minor Currency Pairs (or Minors), Cross Currency Pairs (or Crosses), and Forex Exotic Currency Pairs (or Exotic Pairs)?
To be more specific about forex majors and minors, we have also listed 7 major pairs, 24 minor pairs, and some popular exotic currency pairs, which are traded most frequently.
Major Currency Pairs or Forex Major Pairs:
In forex trading, Major Currency Pairs or simply the Forex Major Pairs, are those pairs which are having USD ($) at one side (either as base or quote currency) and on the other side it has some selected high-value global currencies (Mainly EUR, GBP, JPY, CAD, CHF, AUD, and NZD).
Although the definition varies person to person, typically the below 7 currency pairs (shown in table) are considered as Forex Major Pairs or Major Currency Pairs.
The analysis shows that the combined trade value of these 7 pairs accounts for 82% of the total global forex trade. Also, these currency pairs are highly liquid at most of the time of a day.
Check the below table for the list of Forex Majors (7 Major Pairs):
| FOREX PAIR | COUNTRIES | FX TERM | VOLATILITY |
|---|---|---|---|
| EUR/USD | Euro-Zone / United States | “Euro Dollar” | High |
| GBP/USD | United Kingdom / United States | “Pound Dollar” | High |
| USD/JPY | United States / Japan | “Dollar Yen” | High |
| USD/CAD | United States / Canada | “Dollar Loonie” | Medium-High |
| USD/CHF | United States/ Switzerland | “Dollar Swissy” | Medium |
| AUD/USD | Australia / United States | “Aussie Dollar” | Medium-High |
| NZD/USD | New Zealand / United States | “Kiwi Dollar” | Medium |
Minor Pairs or Cross Currency Pairs
Currency Pairs that don’t contain US Dollar (USD), but contains currencies of major economies (EUR, GBP, JPY, CHF, AUD, CAD, and NZD) both as base currency and quote currency, is referred to as Minor Currency Pairs or Minor Pairs or Cross Currency Pairs or simply “Crosses”.
These Currency Pairs are traded less frequently and in lower volumes than forex major pairs.
Now the question is how these currency pairs came to the picture?
Traditionally, brokers used to only allow currency conversion to USD only. If someone wants to exchange any currency other than USD, then he had to first convert to USD and then convert back to the desired currency.
This was a very hectic and time-consuming process. So gradually they started to offer these currency pairs to remove these restrictions and for a faster processing of the request.
Below lists contains all the forex minor pairs or cross currency pairs that are frequently used in forex trading.
EURO CROSSES:
There are the popular forex minor pairs, in which one of the currency is EURO (EUR). Some of these pairs are as popular as forex majors.
| FOREX PAIR | COUNTRIES | FX TERM | VOLATILITY |
|---|---|---|---|
| EUR/CHF | Euro-Zone / Switzerland | “Euro Swissy” | Medium |
| EUR/GBP | Euro-Zone / United Kingdom | “Euro Pound” | Medium |
| EUR/CAD | Euro-Zone / Canada | “Euro Loonie” | Medium-High |
| EUR/AUD | Euro-Zone / Australia | “Euro Aussie” | High |
| EUR/NZD | Euro-Zone / New Zealand | “Euro Kiwi” | Medium |
| EUR/JPY | Euro-Zone / Japan | “Euro Yen” or “Yuppy” | High |
POUND CROSSES:
There are the popular minor pairs in which one of the currency is Great Britain Pound (GBP). Some of these pairs are as popular as forex major pairs.
| FOREX PAIR | COUNTRIES | FX TERM | VOLATILITY |
|---|---|---|---|
| EUR/GBP | Euro-Zone / United Kingdom | “Euro Pound” | Medium |
| GBP/JPY | United Kingdom / Japan | “pound Yen” or “Guppy” | High |
| GBP/CHF | United Kingdom / Switzerland | “Pound Swissy” | Medium |
| GBP/AUD | United Kingdom / Australia | “Pound Aussie” | Medium-High |
| GBP/CAD | United Kingdom / Canada | “Pound Loonie” | Medium |
| GBP/NZD | United Kingdom / New Zealand | “Pound Kiwi” | Medium-High |
YEN CROSSES:
There are the popular forex minor pairs, in which one of the currency is Japanese Yen (JPY). These pairs are not as popular as forex majors but used frequently in forex trading.
| FOREX PAIR | COUNTRIES | FX TERM | VOLATILITY |
|---|---|---|---|
| EUR/JPY | Euro-Zone / Japan | “Euro Yen” or “Yuppy” | High |
| GBP/JPY | United Kingdom / Japan | “pound Yen” or “Guppy” | High |
| CHF/JPY | Switzerland / Japan | “Swissy Yen” | Medium |
| CAD/JPY | Canada / Japan | “Loonie Yen” | High |
| AUD/JPY | Australia / Japan | “Aussie Yen” | Medium-High |
| NZD/JPY | New Zealand / Japan | “Kiwi Yen” | Medium |
OTHER CROSSES:
There are the popular minor pairs, in which one of the currency is from a Tier-1 country ( like Australia, Canada etc). Although these minors are not as popular as the forex major pairs, still somewhat moderately traded in the forex market.
| FOREX PAIR | COUNTRIES | FX TERM | VOLATILITY |
|---|---|---|---|
| AUD/CHF | Australia / Switzerland | “Aussie Swissy” | Medium-High |
| AUD/CAD | Australia / Canada | “Aussie Loonie” | Medium-High |
| AUD/NZD | Australia / New Zealand | “Aussie Kiwi” | Medium-Low |
| CAD/CHF | Canada / Switzerland | “Loonie Swissy” | Medium-Low |
| NZD/CHF | New Zealand / Switzerland | “Kiwi Swissy” | Medium-Low |
| NZD/CAD | New Zealand / Canada | “Kiwi Loonie” | Medium-Low |
Forex Exotic Currency Pairs
Exotic currency pairs or Forex Exotic Pairs are comprised of one major currency coupled with the currency of an emerging economic nation, such as Brazil, Mexico, Denmark etc (For India only especially those INR Pairs).
Below table shows few examples of exotic currency pairs, but depending on your Forex broker you might also get many other options.
Depending on your Forex broker, you might see one or more of the following exotic currency pairs hence it’s beneficial to know what they are.
| FOREX PAIR | COUNTRIES | FX TERM | VOLATILITY |
|---|---|---|---|
| USD/HKD | United States / Hong Kong | Low | |
| USD/SGD | United States / Singapore | Low | |
| USD/ZAR | United States / South Africa | “Dollar Rand” | Low |
| USD/THB | United States / Thailand | “Dollar Baht” | Low |
| USD/MXN | United States / Mexico | “Dollar Peso” | Medium-Low |
| USD/DKK | United States / Denmark | “Dollar Krone” | Low |
| USD/SEK | United States / Sweden | Low | |
| USD/NOK | United States / Norway | Low | |
| USD/INR | United States / India | “Dollar Rupee” | Very Low |
| GBP/INR | United Kingdom / India | “Pound Rupee” | Very Low |
One thing you should remember that these pairs are less volatile and not traded as heavily as the forex majors and minors. Also, the transaction cost, spread, and swap fee of these exotic currency pairs are usually 2-3 times higher than that of the forex majors or Minors.
[See Also: Relation Between Bid/Ask Spread and Liquidity]
We hope that you have enjoyed the above article on Forex Majors and Minors, and also Forex Exotic Currency pairs. Be with us to explore forex trading, stocks trading, and other money-making opportunities.
Leave us some comments if you have any questions about Major Currency Pairs, Minor Currency Pairs, or Exotic Currency Pairs.
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