# Currency Pairs: Majors, Minors and Exotics

> Forex trades currencies in pairs, like EUR/USD. Learn base and quote currencies, how to read a quote, majors, crosses and exotics, and what moves each pair.

Source: https://learn.tradelabsai.com/forex/currency-pairs/  
Track: Forex · Level: Beginner · Updated: 2026-10-03  
Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice.  
Cite as: TradeLabs Learn, "Currency Pairs: Majors, Minors and Exotics", https://learn.tradelabsai.com/forex/currency-pairs/

In the foreign exchange market, currencies are always traded in pairs. Buying one currency means selling another, so every quote shows the price of one currency in terms of a second. EUR/USD at 1.0850 means one euro costs 1.0850 US dollars. Understanding how pairs are quoted, which pairs are most liquid and what drives each one is the starting point for trading forex. The overview of the market is in [What Is Forex?](https://learn.tradelabsai.com/markets/what-is-forex/).

## Base and quote currency

| Part | In EUR/USD | Meaning |
|---|---|---|
| Base currency | EUR | The currency being priced; always 1 unit |
| Quote currency | USD | How much of this currency one unit of the base costs |
| Price | 1.0850 | 1 EUR = 1.0850 USD |

- **Buying EUR/USD** means buying euros and selling dollars. You profit if the euro strengthens against the dollar (the price rises).
- **Selling EUR/USD** means selling euros and buying dollars. You profit if the euro weakens (the price falls).

## Bid, ask and spread

A forex quote has two prices:

**Example: Reading a quote**
EUR/USD 1.0849 / 1.0850. The bid (1.0849) is what you receive if you sell euros; the ask (1.0850) is what you pay to buy them. The spread is 1 pip (0.0001). Buying 100,000 euros and selling immediately would cost 100,000 × 0.0001 = $10. See [Bid-Ask Spread](https://learn.tradelabsai.com/markets/bid-ask-spread/) and [Pips and Pipettes](https://learn.tradelabsai.com/forex/pips-and-pipettes/).

## Categories of pairs

### Majors

The majors pair the US dollar with other leading currencies. They are the most liquid and have the tightest spreads.

| Pair | Nickname | Currencies |
|---|---|---|
| EUR/USD | Fiber | Euro, US dollar |
| USD/JPY | Gopher | US dollar, Japanese yen |
| GBP/USD | Cable | British pound, US dollar |
| USD/CHF | Swissie | US dollar, Swiss franc |
| AUD/USD | Aussie | Australian dollar, US dollar |
| USD/CAD | Loonie | US dollar, Canadian dollar |
| NZD/USD | Kiwi | New Zealand dollar, US dollar |

"Cable" comes from the transatlantic telegraph cable once used to send pound and dollar prices between London and New York.

### Crosses

Crosses pair two major currencies without the dollar, such as EUR/GBP, EUR/JPY and GBP/JPY. Their prices are derived from the two dollar pairs. Yen crosses such as GBP/JPY are known for large moves.

### Exotics

Exotics pair a major currency with an emerging market currency, such as USD/TRY (Turkish lira), USD/ZAR (South African rand) or USD/MXN (Mexican peso). They have wider spreads, higher volatility, higher interest rate differentials and more political risk. See [FX Liquidity](https://learn.tradelabsai.com/forex/fx-liquidity/).

## How much trading happens

The Bank for International Settlements Triennial Survey reported average daily forex turnover of about $7.5 trillion in April 2022. The US dollar was on one side of about 88% of all trades, and EUR/USD was the most traded pair, followed by USD/JPY and GBP/USD.

## Market conventions

- **Which currency is base:** set by convention. EUR, GBP, AUD and NZD are usually the base against the dollar; for most others, the dollar is the base (USD/JPY, USD/CAD).
- **Decimal places:** most pairs quote to four decimals (five with fractional pips); yen pairs quote to two (three with fractional pips).

## Calculating a cross rate

```
EUR/JPY = EUR/USD × USD/JPY
```

If EUR/USD is 1.0850 and USD/JPY is 150.00, EUR/JPY ≈ 162.75.

## What moves currency pairs

| Driver | Effect | Lesson |
|---|---|---|
| Interest rate differences | Higher rates tend to attract capital | [Interest Rate Differentials](https://learn.tradelabsai.com/forex/interest-rate-differentials/) |
| Central bank policy | Rate decisions and guidance | [Central Banks Explained](https://learn.tradelabsai.com/macro/central-banks-explained/) |
| Economic data | Growth, inflation, employment | [Trading Economic Releases](https://learn.tradelabsai.com/macro/trading-economic-releases/) |
| Risk sentiment | Safe havens (USD, JPY, CHF) rise in stress | [Currency Correlations](https://learn.tradelabsai.com/forex/currency-correlations/) |
| Trade and capital flows | Exports, investment flows | |
| Commodity prices | AUD, CAD, NOK linked to commodities | |
| Intervention | Governments buying or selling their currency | [Central Bank Intervention](https://learn.tradelabsai.com/forex/central-bank-intervention/) |

## Common mistakes

- **Confusing which way a pair moves** when the dollar strengthens: EUR/USD falls, USD/JPY rises.
- **Ignoring wide spreads** on exotics.
- **Trading many correlated pairs** as if they were separate bets. See [Currency Correlations](https://learn.tradelabsai.com/forex/currency-correlations/).

## Frequently asked questions

### What is a currency pair?

A quote showing the price of one currency in terms of another, such as EUR/USD, where the first is the base and the second is the quote currency.

### What are the major currency pairs?

EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, USD/CAD and NZD/USD, all involving the US dollar.

### What is a cross currency pair?

A pair of two major currencies that does not include the US dollar, such as EUR/GBP or EUR/JPY.

Next, learn how forex price moves are measured in [Pips and Pipettes](https://learn.tradelabsai.com/forex/pips-and-pipettes/).

## Sources

- Bank for International Settlements, [Triennial Central Bank Survey](https://www.bis.org/statistics/rpfx22.htm)

## Continue learning

- Next lesson: [Pips and Pipettes](https://learn.tradelabsai.com/forex/pips-and-pipettes/)
- Related: [What Is Forex?](https://learn.tradelabsai.com/markets/what-is-forex/): Forex is the global market for exchanging currencies. Learn how currency pairs are quoted, who trades them, what moves exchange rates and the risks for traders.
- Related: [Pips and Pipettes](https://learn.tradelabsai.com/forex/pips-and-pipettes/): A pip is the standard unit of movement in a currency pair; a pipette is a tenth of a pip. Learn pip sizes, how to calculate pip value and convert pips to money.
- Related: [Lots: Standard, Mini and Micro](https://learn.tradelabsai.com/forex/lots-standard-mini-and-micro/): Forex positions are measured in lots. Learn standard, mini, micro and nano lot sizes, their pip values, the exposure they create and how to choose the right size.
- Related: [Forex Trading Sessions](https://learn.tradelabsai.com/forex/forex-trading-sessions/): Forex trades 24 hours a day, five days a week, across four main sessions. Learn session times, overlaps, which pairs move when and how sessions affect spreads.
- Related: [Currency Correlations](https://learn.tradelabsai.com/forex/currency-correlations/): Many currency pairs move together or in opposite directions. Learn common correlations, safe havens and commodity currencies, and how to avoid doubling your risk.
- Related: [Forex Trading](https://learn.tradelabsai.com/markets/forex-trading/): How forex trading works in practice: choosing pairs, lot sizes, pips, leverage, sessions, costs and risk management, with a fully worked EUR/USD trade.