Every forex quote is a pair: the first currency (the base) priced in the second (the quote). EUR/USD at 1.0850 means one euro costs 1.0850 US dollars. Buying EUR/USD means buying euros and selling dollars at the same time. Pairs are grouped by how widely their currencies are traded.
Majors
The seven majors pair the US dollar with the euro, yen, pound, Swiss franc, Australian, Canadian and New Zealand dollars. They are the most traded instruments in the world, with the tightest spreads and the deepest liquidity. EUR/USD alone accounts for roughly a fifth of all forex turnover.
Minors (crosses)
Crosses pair two major currencies without the dollar, such as EUR/GBP or GBP/JPY. Spreads are a little wider. Some, like GBP/JPY, are known for large daily ranges, which attracts traders but magnifies risk.
Exotics
Exotics pair a major currency with the currency of a smaller or emerging economy. Spreads can be many times wider, swaps can be large, liquidity can disappear outside local hours, and moves can be violent around political events or capital controls.
| Group | Typical retail spread | Daily range | Good for |
|---|---|---|---|
| Majors | About 0.1 – 1.5 pips | Moderate | Most strategies, especially short-term |
| Minors | About 1 – 4 pips | Moderate to large | Swing trading, specific themes |
| Exotics | Often 10 – 100+ pips | Large and jumpy | Experienced traders with a specific view |
Key takeaways
- A forex pair prices the base currency in the quote currency.
- Majors all include the US dollar and have the tightest spreads and deepest liquidity.
- Minors (crosses) pair two major currencies; exotics pair a major with an emerging-market currency.
- Costs and risk rise sharply from majors to exotics, so most traders start with one or two majors.