What Are Minor (Non-Major) Pairs in the Forex Market?

What Are Minor (Non-Major) Pairs in the Forex Market And Their Role in the Economy and Trading. This article is not financial advice or prediction of any asset but for common knowledge only.

In the foreign exchange (forex) market, currency pairs are classified into three main categories: major pairs, minor pairs (also known as cross-currency pairs), and exotic pairs. Minor pairs, the focus of this article, are currency pairs that involve two major currencies but exclude the U.S. dollar (USD).

Definition of Minor Pairs

Minor pairs—often called “crosses” or “cross currency pairs”—consist of highly traded currencies from developed economies, such as the euro (EUR), British pound (GBP), Japanese yen (JPY), Swiss franc (CHF), Australian dollar (AUD), Canadian dollar (CAD), and New Zealand dollar (NZD). Unlike major pairs (which always include the USD, like EUR/USD or GBP/USD), minor pairs allow direct exchange between these non-USD currencies.

This classification stems from the USD’s dominance in global forex turnover (involved in about 88-90% of trades as of recent surveys). Pairs without the USD are “minor” in volume but still highly liquid compared to exotics.

There is broad consensus on this definition across sources, though some older texts loosely used “minor” for any non-major pair (including those with emerging currencies). Modern usage (post-2010s, including 2025 data) distinguishes:

Minors/Crosses: Non-USD pairs among the top 7-8 major currencies.
Exotics: A major currency paired with an emerging market currency (e.g., USD/TRY).

Role in the Global Economy

Minor pairs facilitate direct trade and investment between non-U.S. economies, bypassing the USD as an intermediary. This supports:

Regional Trade: European companies trading with Japan use EUR/JPY for settlements, reducing conversion costs and USD exposure.
Diversification of Reserves: Central banks hold non-USD assets (e.g., EUR or JPY bonds) for balance.
Economic Indicators: Movements reflect relative strength between blocs (e.g., EUR/GBP signals Eurozone vs. UK performance).
Hedging: Businesses hedge currency risk without USD involvement, vital in integrated regions like Europe.

Though minor pairs account for 10-15% of total forex volume (far less than majors’ 75-80%), they enhance market efficiency by providing alternative pricing mechanisms and liquidity for cross-border flows outside the dollar system.

Role in Trading

Minor pairs offer traders:

Diversification: Exposure to non-USD dynamics, useful when USD sentiment dominates majors.
Different Volatility Profiles: Often less tied to U.S. news, reacting more to regional events (e.g., ECB for EUR crosses).
Moderate Liquidity: Wider spreads than majors but tighter than exotics; suitable for swing or position approaches.
Carry Trade Opportunities: Pairs like AUD/JPY historically attract carry strategies due to interest differentials.

They represent a smaller but important segment, allowing focus on specific economic relationships.

Notable Minor Pairs with Brief Details

Here are some of the most commonly referenced and traded minor pairs (based on liquidity and volume data up to 2025):

EUR/GBP (“Euro-Sterling” or “Chunnel”): Reflects Eurozone vs. UK economic divergence; influenced by ECB/BoE policies and Brexit-related factors. One of the most stable minors.
EUR/JPY (“Euro-Yen”): Sensitive to European growth vs. Japanese monetary policy; often used as a risk sentiment gauge.
GBP/JPY (“Geppy” or “Beast”): Known for high volatility due to GBP’s news sensitivity and JPY’s safe-haven status; popular for trend trading.
EUR/AUD (“Euro-Aussie”): Ties Eurozone data to commodity-driven Australian economy (mining, China trade).
GBP/AUD: Combines UK’s services economy with Australia’s resources sector.
AUD/JPY: Classic carry pair; reflects risk appetite (AUD high-yield, JPY low-yield).
NZD/JPY: Similar to AUD/JPY but tied to New Zealand’s dairy/agriculture exports.
EUR/CHF: Influenced by Swiss National Bank’s interventions and Eurozone stability.
AUD/NZD (“Aussie-Kiwi”): Closely linked economies; low volatility, often range-bound.
CAD/JPY: Canadian dollar (oil-linked) vs. yen; commodity-sensitive.

These pairs generally have decent liquidity during overlapping sessions (e.g., European-Asian for EUR/JPY) but narrower ranges than majors.

Minor pairs bridge major economies without USD dominance, supporting efficient global trade while offering traders diversified exposure to regional strengths and risks. They play a supporting—but essential—role in the interconnected forex ecosystem.