A crash course in major, minor and exotic currency pairs

In the forex market, you deal with two currencies at a time. For example, when you’re selling US dollars, you need to know what you’re selling it for.

Let’s say you’re selling dollars and getting euros in return. In that case, you’re trading the USD/EUR currency pair.

In forex, you’ll be talking about currency pairs a lot. Whether you’re trading JPY/EUR (Japanese yen and euro) or ZAR/MXN (South African rand and Mexican peso), currency pairs will dominate the discussion at every turn.

There are three types of currency pairs: major,minor and exotic.

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Major currency pairs

Major currency pairs consist of the most frequently traded currencies globally. Because they have massive liquidity, you’re able to trade them virtually always. Furthermore, you’ll find the lowest spreads — or brokerage costs — when trading these pairs.

Major currency pairs include:

Notice that every major currency pair has the US dollar on one side. With good reason: The dollar is the world’s leading reserve currency, and it’s involved in about 88% of currency trades.
Foreign exchange currency pairs explained

Minor currency pairs

When a currency pair doesn’t include the US dollar, it’s called a minor currency pair or a cross-currency pair.

Here are a few minor currency pairs:

• EUR/GBP — Euro/British pound
• EUR/AUD — Euro/Australian dollar
• GBP/JPY — British pound/Japanese yen
• CHF/JPY — Swiss franc/Japanese yen
• NZD/JPY — New Zealand dollar/Japanese yen
• GBP/CAD — British pound/Canadian dollar

The most widely traded minor pairs consist of the euro, yen or British pound.

Exotic currency pairs

An exotic currency pair includes a major currency and the currency of a developing economy (such as Brazil or South Africa). You won’t find exotic pairs as often as you’ll find major or minor pairs, which means the spreads can be higher when trading them.

Exotic currency pairs include:

Which pairs should I trade?

Picking the right currency pairs to trade depends on your experience as a forex trader. If you’re new to the game, it’s best to stick with the major and minor pairs — it’s easier to find trades and you’ll get lower spreads. Exotic pairs are more difficult to work with because they’re far less liquid and you’ll find higher spreads.

That said, it’s possible to make money with exotic pairs as long as you know what you’re doing. These pairs can be riskier, but they can pay off more significantly.

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IG		Currencies	50:1	0%	IG offers tight spreads and lets you access over 80 currency pairs with leverage as high as 1:50, but the platform is far from risk-free and losses can exceed deposits.	Go to site More Info		loading Fetching your data...
Forex.com		Currencies	Up to 50:1	0%	Largest forex broker in the United States with assets of $1.449 billion.	Go to site More Info		loading Fetching your data...
Topstep Trader		Currencies	100:1	$125 per month	Go to site		loading Fetching your data...

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Bottom line

The more widely traded a currency is, the easier it will be to trade and the lower spreads you’ll find. Learn more in our guide to foreign exchange.

Frequently asked questions

• How do I start trading in forex?

  You can get started by signing up for a forex trading platform like Wise.

• Do I need a lot of money to start trading in forex?

  You don’t need much money to start trading. Many online forex brokers, for example, have no minimum deposit. However, many experts recommend starting with at least a few thousand dollars. Even still, consider trading only if you’ve practiced with paper or simulated trading first.