CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Our Top 5 Forex Exotic Pairs

Andrew Moran - Writer for Fortrade
By Andrew Moran
Joel Taylor - Editor for Fortrade
Edited by Joel Taylor

Updated January 9, 2024.

Coins in front of an economy trend graph

In forex trading, there are exotic pair crosses. This involves the pair containing one major currency (U.S. dollar or euro) trading against a currency with low volumes (like the Turkish lira or Mexican peso). Exotic currency pairs tend to be more volatile than their major alternatives, but may still offer some potential profits if you know what you're doing.




1. EUR/TRY

So far, the Turkish lira is not replicating its volatile performance of 2022, cratering double digits in one session. But the currency is still susceptible to bad public policymaking risks in Ankara, which can help your trade if you are paying attention to the political and economic situation unfolding in Turkey.

Remember, Turkey is still going through an inflationary and currency crisis, so there are plenty of challenges ahead for the lira. With an election coming up, you might want to monitor the results if you are interested in the EUR/TRY trade.

» Learn the differences between major and minor currency pairs

2. USD/SEK

For the USD/SEK currency pair, each country's respective central bank might be the main focus for investors. The U.S. and Sweden are both going through high inflation, and the Federal Reserve and the Riksbank have raised interest rates to combat these price pressures. American and Swedish policymakers have suggested they continue pulling the trigger on rate hikes to bring inflation down to their target levels. Ultimately, the best way to trade USD/SEK might be to concentrate on monetary policy.



3. USD/THB

Despite optimism over the Thai baht and other Asian currencies heading into the new year, market analysts trimmed their bullish expectations and have turned bearish on these currencies amid renewed strength in the greenback on Fed tightening efforts. Indeed, the Thai baht has been the region's top-performing currency so far this year, but experts are unsure whether the currency can maintain its strength.

4. USD/ZAR

What happens in the global economy will influence the South African rand's direction more than what occurs within the continent's largest economy. Of course, if the international marketplace slips into a recession, this would weigh far more on the rand and support the buck. While this is undoubtedly a volatile exotic pair, economic data suggests that there may potentially turn a profit.

Also, you should keep an eye on metal commodities, since South Africa possesses a sizable resource economy.

» Ready to start trading CFDs? Learn more about forex currencies with Fortrade

5. USD/CNH

There are two China-related currency pairs—the onshore yuan, which is mainly used for exporters, and the offshore yuan (CNH), which is used in international markets for investors to speculate on the currency. The USD/CNH is an exotic pair, despite both economies being the largest in the world, and it can definitely be an interesting one to trade on the exotic front.

Although the trade volume is much lower, there is plenty of data and news to utilize, which can undoubtedly add to your strategies. Traders will be monitoring the post-pandemic recovery.

» Interested in XAU/USD instead? Read more about XAU/USD pair



Should You Trade Exotic Pairs?

Are you better off trading the major currency pairs (USD/CAD, EUR/USD, or GBP/JPY), or should you delve into the world of exotic cross pairs? Well, for one thing, exotics are usually more volatile than the majors, which could result in higher potential returns because of these fluctuations. That said, exotic pairs account for a smaller portion of the total forex market, so if you are not careful enough with your strategies, you might be at significant risk of sharp losses.

As always, when you are embarking upon a new frontier, only invest what you can afford to lose and ensure you are equipped with the knowledge to make the right trading decisions.



Note: Fortrade offers the ability to trade the price changes of instruments with CFDs and NOT to buy/sell ownership of the instrument itself