Forex trading is a popular financial activity that involves the buying and selling of currencies. The forex market is the largest and most liquid market in the world, with an estimated $5.3 trillion traded every day. While most forex traders focus on major currency pairs like the EUR/USD, there are also exotic currency pairs that offer unique trading opportunities. In this article, we will explain what exotic currency pairs are and provide a list of all the forex exotic currency pairs.
What are exotic currency pairs?
Exotic currency pairs are currency pairs that are not as commonly traded as the major currency pairs. These currency pairs are usually from emerging or developing economies, and they have less liquidity and higher volatility than major currency pairs. Exotic currency pairs are not suitable for beginner traders because they require more experience and knowledge to trade successfully. However, they can offer higher potential profits than major currency pairs due to their higher volatility.
Exotic currency pairs have lower trading volumes, which means that their bid-ask spreads are wider than those of major currency pairs. This means that traders need to pay more in transaction costs when trading exotic currency pairs. However, some brokers offer tight spreads on exotic currency pairs to attract traders to this market.
List of forex exotic currency pairs
1. USD/HKD
The USD/HKD currency pair represents the exchange rate between the US dollar and the Hong Kong dollar. Hong Kong is a major financial center and has a free-floating currency, which makes the USD/HKD pair volatile.
2. USD/ZAR
The USD/ZAR currency pair represents the exchange rate between the US dollar and the South African rand. The South African economy is heavily dependent on commodity exports, which makes the USD/ZAR pair sensitive to commodity prices.
3. USD/SGD
The USD/SGD currency pair represents the exchange rate between the US dollar and the Singapore dollar. Singapore is a major financial center and has a free-floating currency, which makes the USD/SGD pair volatile.
4. USD/THB
The USD/THB currency pair represents the exchange rate between the US dollar and the Thai baht. Thailand is an emerging market economy that is heavily dependent on exports, which makes the USD/THB pair sensitive to global trade conditions.
5. USD/MXN
The USD/MXN currency pair represents the exchange rate between the US dollar and the Mexican peso. Mexico is one of the largest economies in Latin America and is heavily dependent on exports to the US, which makes the USD/MXN pair sensitive to US economic conditions.
6. USD/RUB
The USD/RUB currency pair represents the exchange rate between the US dollar and the Russian ruble. Russia is a major oil producer and exporter, which makes the USD/RUB pair sensitive to oil prices. The pair is also sensitive to geopolitical risks associated with Russia.
7. USD/TRY
The USD/TRY currency pair represents the exchange rate between the US dollar and the Turkish lira. Turkey is an emerging market economy that has faced political instability and economic challenges in recent years, which makes the USD/TRY pair volatile.
8. USD/CNH
The USD/CNH currency pair represents the exchange rate between the US dollar and the offshore Chinese yuan. The pair is sensitive to US-China trade tensions and Chinese economic data.
9. USD/BRL
The USD/BRL currency pair represents the exchange rate between the US dollar and the Brazilian real. Brazil is the largest economy in Latin America and is heavily dependent on commodity exports, which makes the USD/BRL pair sensitive to commodity prices.
10. USD/INR
The USD/INR currency pair represents the exchange rate between the US dollar and the Indian rupee. India is a major emerging market economy that has a large population and a growing middle class, which makes the USD/INR pair an attractive market for investors.
Conclusion
Exotic currency pairs offer unique trading opportunities for experienced forex traders. These currency pairs have less liquidity and higher volatility than major currency pairs, which means that traders need to have a good understanding of market dynamics to trade them successfully. Exotic currency pairs can offer higher potential profits than major currency pairs, but they also come with higher transaction costs. Traders should carefully consider their risk tolerance and trading strategies before trading exotic currency pairs.
