What Are Currency Pairs? A Beginner’s Guide to Majors, Minors, and Exotics

If you are new to Forex trading, one of the first concepts you’ll encounter is currency pairs. Since currencies are always traded in relation to one another, Forex trading involves buying one currency while simultaneously selling another. Understanding the structure of currency pairs, and the differences between majors, minors, and exotics, is essential for every beginner.

In this guide, we’ll break down what currency pairs are, list out the major, minor, and exotic pairs, and explain why knowing the differences matters for your trading success.

What Are Currency Pairs?

A currency pair is a quotation of two different currencies, showing how much of one currency (the quote currency) is needed to purchase one unit of another (the base currency).

For example:

EUR/USD = 1.0850
This means 1 Euro (EUR) is worth 1.0850 US Dollars (USD).

Currency pairs are written as BASE/QUOTE. The first currency is the base currency, while the second is the quote currency.

Categories of Currency Pairs

There are three main types of currency pairs in Forex:

Major Pairs
Minor Pairs
Exotic Pairs

Each has its own characteristics, volatility, and popularity among traders.

1. Major Currency Pairs

The major pairs are the most traded currency pairs in the world. They all include the US Dollar (USD) because it is the world’s reserve currency and the most traded.

List of Major Pairs:

EUR/USD (Euro / US Dollar)
GBP/USD (British Pound / US Dollar)
USD/JPY (US Dollar / Japanese Yen)
USD/CHF (US Dollar / Swiss Franc)
USD/CAD (US Dollar / Canadian Dollar)
AUD/USD (Australian Dollar / US Dollar)
NZD/USD (New Zealand Dollar / US Dollar)

Key Characteristics of Major Pairs:

High liquidity (easy to buy and sell)
Low spreads (cheaper to trade)
Popular with both beginners and professionals
Less volatile compared to exotics

Example:
If you’re a beginner, trading EUR/USD is often recommended because it has high liquidity and relatively stable movements.

2. Minor Currency Pairs

Minor pairs are also known as cross-currency pairs because they don’t include the US Dollar. Instead, they combine the world’s other major currencies.

List of Minor Pairs:

EUR/GBP (Euro / British Pound)
EUR/AUD (Euro / Australian Dollar)
EUR/JPY (Euro / Japanese Yen)
EUR/CAD (Euro / Canadian Dollar)
EUR/CHF (Euro / Swiss Franc)
GBP/JPY (British Pound / Japanese Yen)
GBP/AUD (British Pound / Australian Dollar)
GBP/CAD (British Pound / Canadian Dollar)
GBP/CHF (British Pound / Swiss Franc)
AUD/JPY (Australian Dollar / Japanese Yen)
AUD/CHF (Australian Dollar / Swiss Franc)
AUD/NZD (Australian Dollar / New Zealand Dollar)
CAD/JPY (Canadian Dollar / Japanese Yen)
CHF/JPY (Swiss Franc / Japanese Yen)
NZD/JPY (New Zealand Dollar / Japanese Yen)

Key Characteristics of Minor Pairs:

Slightly wider spreads than majors
Less liquidity but still active
Can provide good trading opportunities due to volatility

Example:
Pairs like EUR/GBP are popular among European traders who don’t always want exposure to the US Dollar.

3. Exotic Currency Pairs

Exotic pairs consist of one major currency (usually USD, EUR, or GBP) and one currency from a developing or smaller economy.

Examples of Exotic Pairs:

USD/TRY (US Dollar / Turkish Lira)
USD/SEK (US Dollar / Swedish Krona)
USD/NOK (US Dollar / Norwegian Krone)
USD/DKK (US Dollar / Danish Krone)
USD/HKD (US Dollar / Hong Kong Dollar)
USD/SGD (US Dollar / Singapore Dollar)
USD/ZAR (US Dollar / South African Rand)
USD/THB (US Dollar / Thai Baht)
USD/MXN (US Dollar / Mexican Peso)
EUR/TRY (Euro / Turkish Lira)
EUR/SEK (Euro / Swedish Krona)
GBP/ZAR (British Pound / South African Rand)

Key Characteristics of Exotic Pairs:

Low liquidity compared to majors and minors
High volatility (prices can move sharply)
Wide spreads (more expensive to trade)
Influenced heavily by political and economic news

Example:
USD/ZAR can move very quickly because South Africa’s economy is sensitive to commodity prices and political shifts. While risky, this volatility can be an opportunity for advanced traders.

Key Differences Between Majors, Minors, and Exotics

Type of Pair	Includes USD?	Liquidity	Volatility	Spread (Trading Cost)	Best For
Majors	Always	Very High	Low to Medium	Low	Beginners & Pros
Minors	No	Medium	Medium	Medium	Intermediate Traders
Exotics	Usually Yes	Low	High	High	Advanced Traders

In Summary

Understanding currency pairs is the first step in mastering Forex trading. Majors offer stability and low costs, minors provide more variety, and exotics bring high risk and potential reward.

For beginners, it’s best to start with major pairs like EUR/USD or GBP/USD, before moving on to minors and exotics as you gain confidence and skill.

If you want to learn Forex trading step by step from basics like currency pairs to advanced strategies we recommend Mikofx Academy as the best place to learn Forex for free. Their resources are beginner friendly, practical, and designed to help you succeed in your trading journey.