Understanding Forex Dynamics: Major vs. Minor Currency Pairs
The foreign exchange market's structure hinges on the distinction between major and minor currency pairs, each offering unique liquidity and volatility profiles. Major pairs, such as EUR/USD and GBP/USD, dominate trading volumes with their high liquidity and tight spreads, anchored by the US dollar's presence.
Minor pairs, or crosses, exclude the USD but still see significant activity, pairing currencies like the euro and British pound. These pairs often exhibit higher volatility, presenting both opportunities and risks for traders navigating the forex battlefield.