Best Exotic Currency Pairs to Trade

Re suggests that From an analytical perspective, From an analytical standpoint, Dollar is one of the primary currencies traded in the forex market and allows traders to trade against other major currencies EUR, GBP and JPY

These dominant currency pairs are derived from some of the world's biggest economies and have significant liquidity

Conversely, However, some traders prefer to trade exotic currency pairs that involve the major currencies paired with currencies from emerging or smaller economies

However, Want to know more these uncommon currency pairs

Additionally, Keep reading to learn all exotic currency pairs, how they differ from other pairs in the market and the most traded exotic currency pairs (noteworthy indeed)

Table of ContentsWhat are Exotic Currency Pairs

Nevertheless, Nevertheless, 7 Most Traded Exotic Currency PairsUSD/ZARSee All 14 Items Currency PairWhy It's TradedKey Influencing FactorsVolatility / LiquidityUSD/ZAR (U (which is quite significant)

However, Dollar / South African Rand) for high volatility and trend-ing potentialCommodity prices, inflation, risk sentimentHigh volatility, low liquidity, wide spreadsEUR/TRY (Euro / Turkish Lira)Speculative trading due to central bank interventionsInflation, political stability, geopolitical eventsVery high volatilityUSD/MXN (U

Dollar / Mexican Peso)Frequently traded; reacts to U (which is quite significant), amid market uncertainty. -Mexico relationsOil prices, interest rates, trade balance, fiscal policyModerate to high volatility, relatively liquidUSD/THB (U

Dollar / Thai Baht)Stable pair; favored for low volatility and macro playsTourism, exports, Thai central bank, risk sentimentLow volatility, stableUSD/SGD (U, in today's financial world

Dollar / Singapore Dollar)Known for stability and liquidityTrade flows, global economic trends, USD trendsLow volatility, high liquidityUSD/NOK (U

Dollar / Norwegian Krone) due to oil-linked Norwegian economyOil prices, economic growth, risk sentimentHigh volatility, large swingsUSD/HKD (U

Dollar / Hong Kong Dollar)Stable due to fixed exchange regimeFX reserves, trade balance, U (which is quite significant), in this volatile climate

Meanwhile, -China relationsLow volatility, high liquidity What are Exotic Currency Pairs

Nevertheless, Exotic currency pairs involve currencies from countries or emerging and are less commonly traded than pairs involving currencies from developed countries

They tend to trade with higher bid-ask spreads and volatility, making them riskier but potentially more fitable

Factors influencing these pairs include political and economic developments, commodity prices, interest rates, market sentiment and interventions from central banks or governments

Nevertheless, Trading exotic currency pairs requires extensive re, knowledge of forex fundamentals and nicals, as well as per risk management and discipline

These factors make them difficult to trade for beginners or low-risk traders

Additionally, Experienced traders seeking greater diversity and opportunities in the forex market may find them more suitable (an important development). 7 Most Traded Exotic Currency PairsIf you are looking to trade exotic currency pairs, you might want to know which ones are the most and widely traded

USD/ZARThe U, in this volatile climate

Dollar/South African rand pair is highly active in the forex market, in light of current trends

Additionally, The South African rand is influenced by various factors, including commodity prices, fiscal policies, trade balance, inflation and risk sentiment (noteworthy indeed)

This pair is known for its high volatility and significant price fluctuations due to low liquidity and high spreads of the Rand (something worth watching), in light of current trends

It s global trends and reacts to changes in investor risk appetite, as well as events in other emerging

On the other hand, EUR/TRYThe Euro/Turkish lira pair is another exotic currency pair (this bears monitoring)

The Turkish lira is influenced by several factors, including economic growth, inflation and political stability

However, The EUR/TRY pair is remarkable for its high volatility from interventions by the Turkish central bank and government and also influence from geopolitical events and trade disputes

USD/MXNThe US Dollar/Mexican peso pair is a and liquid currency pair influenced by the trade balance, oil prices, inflation, interest rates, fiscal policies, political developments and risk sentiment

Conversely, It typically moves with the trends and fluctuations of the US dollar and reacts to changes in U. -Mexico relations

USD/THBThe US Dollar/Thai baht pair is a widely traded exotic currency combination in the forex market, with the Thai baht heavily reliant on tourism and exports

The pair is known for its low volatility and stability from the Thai central bank's tight grip on the exchange rate

Furthermore, Meanwhile, Dollar trends and reacts to global risk appetite and demand for emerging market assets

Dollar/Singapore dollar pair is known for its high liquidity and low volatility (noteworthy indeed)

Moreover, Singapore's strong economy and various factors can influence the Singapore dollar, which usually s the trends of the U (something worth watching)

Dollar while reacting to global economic conditions and trade flows

USD/NOKThe U (an important development)

Dollar/Norwegian krone is a exotic forex pair due to Norway's natural resources and the krone's sensitivity to oil prices, economic growth and risk sentiment (which is quite significant)

The pair is known for its high volatility and large price swings

At the same time, Dollar/Hong Kong dollar offers high liquidity and low volatility

Hong Kong's fixed exchange rate regime for the Hong Kong dollar adds to its stability

However, Its value is affected by factors economic growth, inflation, trade balance, foreign exchange reserves, political stability and U. -China relations, in light of current trends

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However, 's websiteGet Started with OANDATypes of Currency Pairs in the Forex MarketClassification of currency pairs based on ity and liquidity include major, minor and exotic currency pairs, given the current landscape

Meanwhile, Major: Major currency pairs include the U

Dollar and one of the other seven most traded currencies in the world: Euro, Japanese yen, British pound, Swiss franc, Canadian dollar, Australian dollar and New Zealand dollar

Furthermore, Some examples of major currency pairs are USD/JPY, EUR/USD, GBP/USD and USD/CHF

Minor: They involve two major currencies other than the U

Moreover, They're also referred to as cross-currency pairs or crosses

Although they are less liquid and more volatile compared to major currency pairs, they still hold a considerable of the forex market, in this volatile climate

In contrast, Minor currency pairs include EUR/GBP, EUR/JPY, GBP/JPY and AUD/NZD

However, Exotic: Exotic currency pairs consist of one major currency and one currency from a or emerging market, considering recent developments

These pairs are known to be the most volatile and least liquid in the forex market due to low trading volume, high spreads, political instability, economic fluctuations and central bank interventions

Some exotic currency pairs include USD/ZAR, EUR/TRY, USD/MXN and USD/THB

At the same time, Risks Involved with Trading Exotic Forex PairsTrading exotic currency pairs can be rewarding but also risky

Some of the risks involved include:Low liquidity: Exotic currency pairs have lower liquidity, wider bid-ask spreads, higher transaction costs, lower price transparency and higher slippage from fewer market participants and less trading volume

High volatility: Exotic currency pairs have more significant price fluctuations, less predictability and higher risk exposure than major and minor pairs (this bears monitoring)

Furthermore, They also require higher stop-loss orders and have a lower risk-reward ratio

Political instability: Exotic currency pairs are more susceptible to political events and developments in their regions, leading to sudden policy changes, unrest and intervention

Advantages of Trading Exotic Forex PairsTrading exotic forex pairs can offer some benefits for traders who are looking for new opportunities and challenges in the currency market

Higher volatility: Traders who can handle the risk have the potential to make more fit with exotic pairs because of their tendency to have larger price movements compared to major or minor pairs

Diversification: Adding exotic currency pairs to a trading portfolio can diversify and expose it to economic and political factors impacting currencies from emerging, in today's financial world

In contrast, Lower competition: Exotic currency pairs have fewer traders, making them less susceptible to market sentiment and manipulation

Expand Your Portfolio with Exotic Currency PairsVenturing into trading exotic currency pairs can broaden the horizons of forex traders

Moreover, With a understanding of the associated risks, you can explore new trading spects and potentially increase your fits, given the current landscape

Frequently Asked QuestionsQWhy trade exotic currency pairs

A Trading exotic currency pairs can offer higher volatility and diversification value than major or minor pairs

Moreover, The returns may also be more attractive considering the higher risk

QWhat are the most volatile exotic forex pairs

ASome of the most volatile exotic forex pairs are USD/ZAR (U (which is quite significant), in light of current trends

Dollar/South African rand), USD/TRY (U

Dollar/Turkish lira), USD/MXN (U

Meanwhile, Dollar/Mexican peso) and USD/NOK (U, given current economic conditions

Moreover, In contrast, Dollar/Norwegian krone)

QWhat is the strongest currency pair, given the current landscape

AIt’s difficult to definitively determine the strongest currency pair as it varies depending on market conditions, liquidity and volatility

However, some currency pairs are highly tradable and stable, including EUR/USD, GBP/USD, USD/JPY, USD/CAD, AUD/USD, USD/CNY, USD/CHF and GBP/JPY (something worth watching)

These pairs generally have high liquidity, low spreads and strong correlations with other (which is quite significant)

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Nevertheless, Anna YenAnna Yen, CFA is an investment writer with over two decades of fessional finance and writing experience in roles within JPMorgan and UBS derivatives, asset management, crypto, and Family Money Map

She specializes in writing investment topics ranging from traditional asset classes and derivatives to alternatives cryptocurrency and real estate

Her work has been published on sites Quicken and the crypto exchange Bybit.