Minor Currency Pairs
Minor currency pairs, also known as cross-currency pairs or simply crosses, are a type of foreign exchange (FX) trading instrument that does not include the U.S. dollar (USD). These pairs are made up of two currencies that are not the USD, such as the euro (EUR) and the British pound (GBP). Minor currency pairs are typically less liquid than major currency pairs, which include the USD, and are therefore more volatile and risky.
History of Minor Currency Pairs
The concept of minor currency pairs has been around since the early days of foreign exchange trading. In the past, traders would only trade major currency pairs, such as the USD/EUR or USD/GBP. However, as the foreign exchange market has grown and become more sophisticated, traders have begun to trade minor currency pairs as well. This has allowed traders to diversify their portfolios and take advantage of opportunities in different markets.
Today, minor currency pairs are traded on a variety of platforms, including the spot market, futures market, and options market. They are also traded on the over-the-counter (OTC) market, which is a decentralized market where traders can buy and sell currencies without the need for a central exchange.
Table of Comparisons
Currency Pair | Liquidity | Volatility |
---|---|---|
USD/EUR | High | Low |
EUR/GBP | Medium | Medium |
GBP/JPY | Low | High |
Summary
Minor currency pairs are a type of foreign exchange trading instrument that does not include the U.S. dollar. These pairs are typically less liquid than major currency pairs and are therefore more volatile and risky. Traders can take advantage of minor currency pairs by diversifying their portfolios and taking advantage of opportunities in different markets. For more information about minor currency pairs, traders can visit websites such as Investopedia, FXCM, and Oanda.
See Also
- Major Currency Pairs
- Currency Correlations
- Currency Carry Trade
- Currency Hedging
- Currency Swaps
- Currency Futures
- Currency Options
- Currency ETFs
- Currency Arbitrage
- Currency Risk Management