Majors, crosses, exotics: the FX pair hierarchy.
All currency pairs are not equal. The seven majors trade with the tightest spreads and deepest liquidity; crosses and exotics charge progressively more in spread and slippage.
The seven majors
Conventionally, the seven major pairs all involve the US dollar:
| Pair | Nickname | Typical interbank spread | Daily turnover share |
|---|---|---|---|
| EUR/USD | Fiber | ~0.1 pip | ~28% |
| USD/JPY | Gopher | ~0.2 pip | ~13% |
| GBP/USD | Cable | ~0.5 pip | ~11% |
| USD/CHF | Swissy | ~0.5 pip | ~3% |
| USD/CAD | Loonie | ~0.5 pip | ~5% |
| AUD/USD | Aussie | ~0.5 pip | ~6% |
| NZD/USD | Kiwi | ~1.0 pip | ~2% |
Source: BIS Triennial Survey 2022 turnover shares. Spreads are interbank market wholesale; retail brokers add 0.5–2 pip markup typically, though leading retail venues now quote raw spreads with a separate commission.
Cross pairs
Cross pairs (or simply “crosses”) are any pair that doesn't include the US dollar. Common examples:
- EUR/GBP, EUR/CHF, EUR/JPY — the European crosses, second-most-liquid after the majors.
- GBP/JPY, AUD/JPY, CHF/JPY — the JPY crosses, popular with carry traders.
- EUR/AUD, GBP/AUD, EUR/CAD — less-common crosses, wider spreads.
Cross pairs are quoted by brokers as if they were native pairs, but at the institutional level they're usually constructed from two USD-leg trades: EUR/JPY = (EUR/USD) × (USD/JPY). This double-leg execution doubles the bid-ask spread paid in the wholesale market, which retail traders see as a wider quoted cross-pair spread.
Exotics
Exotic pairs combine a major with the currency of an emerging or smaller economy. USD/MXN, USD/ZAR, USD/TRY, USD/HKD, USD/SGD, USD/THB, USD/PLN, EUR/HUF. Characteristics:
- Wide spreads (10–200+ pips at retail level).
- Lower liquidity, particularly outside the local trading session.
- Often subject to capital controls (CNY in particular; partial controls in some Asian and Latin American currencies).
- Higher overnight financing (rollover/swap) due to interest-rate differentials.
Trading sessions and liquidity
FX trades 24/5 (Sunday evening to Friday afternoon). Liquidity is not constant across the day:
- Asian session (Tokyo + Sydney + Singapore overlap, ~00:00–09:00 GMT). Best liquidity for JPY pairs, AUD, NZD. Lower liquidity for European-currency pairs.
- European session (London + Frankfurt, ~07:00–16:00 GMT). Best liquidity for EUR, GBP, CHF pairs. The London market is the largest single FX hub by turnover (~38 %).
- US session (New York, ~12:00–21:00 GMT). Best liquidity for USD pairs broadly.
- European–US overlap (~12:00–16:00 GMT). The single highest-liquidity window of each trading day. Tightest spreads.
What this means for the calculator
Pip-value math is identical across major, cross, and exotic pairs — the calculator applies the same formula. What differs is the cross-rate sourcing for non-USD-leg pairs: the calculator uses bundled cross-rates that are accurate for majors and common crosses, but may be stale for exotics. For exotic-pair pip values requiring high accuracy, source the live cross-rate from your broker rather than relying on the bundled table.