Major, minor and exotic currency pairs
What separates the pairs that trade all day from the ones that gap and widen, and why it matters for your spreads and your risk.
The majors
The major pairs are the most traded currency pairs in the world. Each one includes the US dollar: EUR/USD, GBP/USD, USD/JPY, USD/CHF, USD/CAD, AUD/USD and NZD/USD. Because so many banks, funds and companies trade them, they usually have tight spreads and deep liquidity, especially during the London and New York sessions.
The minors and crosses
Minor pairs, also called crosses, are pairs of major currencies that do not include the dollar, such as EUR/GBP, AUD/NZD, NZD/CAD or EUR/CHF. They trade actively but usually have wider spreads than the majors, and a cross can move for reasons that have little to do with the US economy. PipLadder's own pairs include several crosses, such as NZD/CAD and AUD/CAD, so it pays to understand both currencies in the pair.
The exotics
Exotic pairs combine a major currency with a currency from a smaller or less liquid economy, such as USD/TRY, EUR/ZAR or USD/MXN. They can produce large moves, but they often have much wider spreads, thinner liquidity and sudden gaps, and some are influenced by capital controls or local politics. Exotics carry more risk than most beginners expect.
Whichever group you trade, check the spread before you enter, because it is a cost you pay every time you open and close a position.
Key takeaways
- Majors include the US dollar and usually have the tightest spreads.
- Crosses exclude the dollar and can be driven by two different economies at once.
- Exotics can move sharply but are costly and less predictable to trade.
- Always compare the spread with the size of the moves you are trying to capture.