Quick definition

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Updated: Jan 20, 2023

Exotic currency pairs include one major currency and one currency of a developing or emerging country.

Key details

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  • Exotic currency pairs are traded less frequently compared to majors and minors. 
  • They are riskier to trade because they have less liquidity, more volatility and carry higher trading costs. 
  • Many forex brokers only offer a small number of exotic pairs, although there are hundreds available in total.

What are exotics?

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Exotic pairs consist of a major currency and one from a developing country. One such example would be USD/HUF, which includes the Hungarian Forint alongside the US Dollar. They are generally more volatile than majors or minors and less liquid, resulting in higher trading costs with wider spreads. 

Due to the nature of these types of pairs with their frequent wild moves, exotics are suited to traders with a longer term outlook. While there are many exotic pairs, forex brokers tend to offer only a few due to such low trading volumes. 

Some commonly traded exotic currency pairs are listed below:

  • GBP/ZAR. British Pound/South African Rand
  • EUR/TRY. Euro/Turkish Lira
  • USD/HUF. US Dollar/Hungarian Forint
  • EUR/MXN. Euro/Mexican Peso
  • USD/SEK. US Dollar/Swedish Krona
  • USD/HKD. US Dollar/Hong Kong Dollar
  • EUR/TRY. Euro/Turkish Lira
  • TRY/JPY. Turkish Lira/Japanese Yen
  • NZD/SGD. New Zealand Dollar/Singapore Dollar

Political instability, interest rates, and economical strength are just a few of the factors that affect an exotic currency. Unlike majors and minors, exotics can be drastically impacted by small changes in these factors, making them risky for inexperienced traders. 

Where can I learn more?

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To learn more about currency pairs and forex trading, check out our courses page where you’ll find step by step guides and information. Alternatively, learn about cryptocurrency, the stock market and commodities

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Prash Raval
Financial Writer
Prash is a financial writer for Invezz covering FX, the stock market and investing. For over a decade he has traded spot FX full time while... read more.