Minor currency pairs
Family I · Instruments
Not to be confused with clusd currency pair, currency pair, znusd currency pair.
Minor currency pairs are FX quotations formed by combining one major currency with a currency from a smaller or emerging economy. They are distinct from currency pairs in general because the term refers specifically to this second tier of liquidity and trading volume. The exact list of pairs classified as minor varies by broker and data provider.
Composition and classification
A major currency is generally one of the US dollar, euro, Japanese yen, British pound, Swiss franc, Canadian dollar, Australian dollar or New Zealand dollar. A minor pair contains one of these alongside a currency such as the Mexican peso, South African rand, Turkish lira, Polish zloty or Singapore dollar. The four most traded pairs, which consist of two majors, are called majors rather than minors.
Classification is not fixed. A provider may treat a pair as minor while another treats it as an exotic, depending on liquidity and trading volume. Traders should check the instrument list of the venue they use.
Liquidity and spreads
Minor pairs typically have wider bid-ask spreads and thinner depth than major pairs. Spreads also widen more sharply around news releases, holidays and the close of regional sessions. Margin requirements for minor pairs are often higher than for majors, but the exact ratios are set by the broker or regulator and vary by jurisdiction and by pair.
Worked example
The same trade in a major pair might show a spread of 1.0 pip, giving a cost of 10 USD. The difference illustrates why minor pairs are often avoided for high-frequency or very short-term strategies.
Often confused with
- clusd currency pair
- A clusd currency pair is a specific quotation, not a category of pairs, so it is one instrument rather than a group; the visible sign is that it names a single pair, not a class of pairs.
- currency pair
- A currency pair is any two currencies quoted against each other, while a minor currency pair is a subset defined by the relative size of the two economies; the visible sign is the word minor, which narrows the category.
- znusd currency pair
- A znusd currency pair is an individual quotation, not a classification, so it is one instrument rather than a tier of instruments; the visible sign is that it identifies one specific pair, not a group.