A Guide to Forex Currency Pairs

In case you didn’t know, forex is the most traded product in online trading today. In this article we are going to briefly discuss the main forex pair categories. We are going to help you learn about major, minor, crosses and exotic currency pairs. We are also going to help you understand the difference between the different forex pair categories and how to approach them when an opportunity arises.

Forex Majors

Forex majors are USD denominated currency pairs, high value global currencies such as EUR, GBP, JPY, CAD, CHF, AUD, NZD where USD is at one side as a base or a quote currency. This pair is known as a major currency pair. As these currencies are from highly stable world economies, they are more liquid than any other pairs. The estimated trade value of these major currency pairs makes up almost 80% of the total global Forex trade.

Minor or Cross Currency Pairs

In simple terms, currency pairs that don’t contain USD as a base or quote currency but have one of the high valued currencies such as EUR, GBP, JPY, CAD, CHF, AUD, NZD, are known as a minor or cross currency pair.

While majors make up the most of the Forex market, the minor currency pairs make up most of the rest of the market. Some minor currency pairs such as EURGBP, EURJPY and GBPJPY are among the favorites for many traders and highly liquid as majors.

Exotic Currency Pairs

Exotic currency pairs refer to those from emerging economies such as Denmark, Hong Kong, Singapore, Malaysia, Thailand, Brazil, Mexico, India, Pakistan etc. Exotic currency pairs are comprised of one major currency paired with the currency of a developing nation. These pairs are less liquid and are always traded with caution.

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