Quick definition

Updated: Jan 20, 2023

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

Key details

  • 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?

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?

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

Sources & references
Risk disclaimer

Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

Prash Raval
Financial Writer
When not researching stocks or trading, Prash can be found either on the golf course, walking his dog or teaching his son how to kick a… read more.