Minor Pair
Trading BasicsA currency pair that does not include the US dollar but consists of other major currencies. Examples include EUR/GBP, EUR/JPY, and GBP/JPY. Also called cross pairs.
What Are Minor Pairs?
Minor pairs (also called Cross Pairs) are Currency Pairs that do not include the US dollar but combine two other major currencies. Popular examples include EUR/GBP, EUR/JPY, GBP/JPY, AUD/NZD, and EUR/CHF.
Characteristics of Minor Pairs
Minor pairs typically have wider Spreads than Major Pairs but narrower spreads than Exotic Pairs. EUR/GBP and EUR/JPY often trade with spreads of 1-3 Pips. Liquidity is lower than the majors, which means slightly more Slippage during fast markets. Under ESMA rules, minor pairs have a maximum Leverage of 1:20.
When to Trade Minor Pairs
Minor pairs can offer better trading opportunities than majors in certain conditions. For instance, during periods when the US dollar is range-bound, EUR/GBP or AUD/NZD might show clearer trends. GBP/JPY is known for large daily ranges, making it popular with swing traders. The best time to trade a cross pair is when both currencies' home markets are active.
Related Terms
Major Pair
A currency pair that includes the US dollar and one of the other most traded currencies. The seven majors are EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, USD/CAD, and NZD/USD.
Exotic Pair
A currency pair that combines a major currency with the currency of a developing economy. Examples include USD/TRY, EUR/ZAR, and USD/MXN.
Cross Pair
A currency pair that does not include the US dollar. Cross pairs are traded directly without converting through USD first. Synonymous with minor pair.
Currency Pair
Two currencies quoted together showing how much of one currency is needed to buy one unit of the other. EUR/USD = 1.0850 means 1 euro costs 1.0850 US dollars.