Exotic Pair
An exotic pair combines a major currency like USD or EUR with a currency from a smaller or emerging economy.
Quick Reference:
Example: AUD/SGH. Lower trading Volumes. Wider Spreads. High Volatility.
Expanded Explanations:
Exotic currency pairs include one major currency and one from an emerging or smaller market. These pairs are less liquid and more sensitive to local economic and political changes, leading to larger price swings and wider spreads. For example, USD/TRY is considered exotic pairs. While they can deliver strong returns, their unpredictable nature and lwoer trading activity make them more suitable for experienced traders who understand market volatility and risk management.