The “major” pairs are the currencies of the leading economic powers paired with the U.S. dollar. The “crosses” are all pairs of the main currencies except the pairs with the U.S. dollar. The exotics are the currencies of developing and rising economic states.
This section presents the most popular pairs in each category and a short discussion of possible economic factors which may have an impact on the exchange rate.
The “exotic pair” is a forex term for a pair which includes one thinly traded (exotic) currency. Exotic currencies are not liquid and are traded at low volumes. They are called exotic because they are not usually traded in a typical brokerage account. Examples of exotic currencies are the Thai baht, the Russian ruble, the Israeli shekel or the Singapore dollar.
New Zealand controls one third of the world dairy and meat products. Therefore, the country’s financial system is focused on the agriculture.The traders should observe economical trends such, as, for instance, a decline in the dairy output in the US as a result of natural disasters or other reasons and the increased demand for the NZ exports. Of course this scenario causes the NZ dollar to appreciate in value in relation to the US dollar.To benefit from this, traders buy (Ask) the NZD/USD currency pair.
Continuing high unemployment rates suffered by the Canadian economy results in the Canadian dollar depreciating against the US dollar.In order to take advantage of this scenario, traders should buy (Ask) the USD/CAD currency pair.
High inflation rates and high unemployment in the European Union (EU) countries drive down the value of EUR/CHF. Traders respond by selling (Bid) the EUR/CHF currency pair.