Exotic Currency Pairs Party

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Exotic Currency Pairs Party

If you are already bored with the minors and majors, allow me to introduce you to the exotic pairs. You obviously would find different people “exotic” depending on where you are from. In Japan, a blond white guy with blue eyes is pretty exotic while American girls (stereotypically) find British or tanned Middle Eastern guys attractive and exotic.In the forex world, exotic pairs are made up of one major currency paired with the currency of an emerging economy like Brazil, Mexico, or a super exotic country like Iran*.

Currency Pair FX Nickname Symbol
Ms. USA / Mr. Brazil Dollar – Real USD/BRL
Ms. USA / Mr. Mexico Dollar – Peso USD/MXN
Ms. USA / Mr. Hong Kong Dollar – Hong Kong Dollar USD/HGD
Ms. USA / Mr. Singapore Dollar – Singapore Dollar USD/SGD
Ms. USA / Mr. South Africa Dollar – Rand USD/ZAR
Ms. USA / Mr. Thailand Dollar – Baht USD/THB
Ms. USA / Mr. Denmark Dollar – Krone USD/DKK
Ms. USA / Mr. Sweden Dollar – Swedish Krona USD/SEK
Ms. USA / Mr. Norway Dollar – Norwegian Krone USD/NOK

The exotic pairs in the currency market have a pretty fair relationship, because both sides look exotic in the eyes of one another. But as pretty as these exotic pairs may look, currency traders don’t bet on them that much and they are not traded as heavily as the majors or minors. And that’s why transaction costs for trading the exotic pairs are actually higher. The spreads for these pairs can sometimes be twice or three times larger than the other pairs.

So having this in mind, you might want to forget about trading the exotics currency pairs on a day-to-day basis, and just enjoy a cheap real-life flight to an exotic country— using the money that you made trading the minors and majors in the currency market.

* Iran = Persia, NOT Shah’s of Sunset