A minor currency pair is a pair of currencies from large, strong economies that do not include the US Dollar. The most popular and most traded minor currency pairs include the Pound, the Euro, and the Yen because, besides the US Dollar, these are the three most traded currencies.
The euro (EUR) is the second most held reserve currency, and the second most traded in the world. It accounts for up to 31% of the daily trading volume in the market. It has maintained the status of being a major reserve currency since its introduction in 1999. An example of a minor currency pair with the euro is EUR/GBP.
The Japanese yen (JPY) is the fourth most held reserve currency, and the third most traded in the forex market, accounting for almost 22% of the daily trading volume. The JPY is traded as a reserve currency because it remains stable during turbulent market times. An example of a minor pair with the Yen is EUR/JPY.
The great British Pound (GBP) is the third most held reserve currency, and the fourth most traded in the forex market, accounting for approximately 13% of daily trade volume. An example of a minor currency pair with the Pound would be EUR/GBP.
The most-traded minor currency pairs that you can trade with CFI include:
- Euro/British Pound (EUR/GBP)
- British Pound/Canadian Dollar (GBP/CAD)
- Swiss Franc/Japanese Yen (CHF/JPY)
- Euro/Australian Dollar (EUR/AUD)
- New Zealand Dollar/Japanese Yen (NZD/JPY)
- British Pound/Japanese Yen (GBP/JPY)
- Minor currency pairs have a smaller market share compared to major pairs
- They have lower market liquidity compared to major pairs
- They have wider forex spreads compared to major pairs