Minor Currency Pairs Explained: Crosses Definition
By Ken Chigbo, Founder, KenMacro. Published 2026-05-13.
Quick answer
Minor currency pairs, often called crosses, are FX pairs that do not include the US dollar but pair two other major currencies. Examples include EUR/GBP, EUR/JPY and GBP/JPY. They are priced synthetically from the underlying USD legs, which means spreads are typically wider and volatility can be sharper than in majors.
What is minor currency pairs?
Minor currency pairs are foreign exchange pairs that exclude the US dollar but combine two other major currencies, typically from the G10 set. Common examples include EUR/GBP, EUR/JPY, EUR/CHF, GBP/JPY, AUD/JPY and CHF/JPY. The desk distinguishes minors from exotics, which pair a major against an emerging market currency such as USD/TRY or USD/ZAR. Although minors trade directly on the interbank market, their pricing is derived from the two underlying USD legs. For instance, EUR/GBP is constructed from EUR/USD and GBP/USD, which is why dealer quotes carry slightly wider spreads than the majors themselves.
How traders use minor currency pairs
Retail traders use minors to express a view on one currency without taking dollar exposure. A trader expecting sterling weakness on a soft UK CPI print might prefer EUR/GBP over GBP/USD, isolating the sterling leg from US dollar noise around the same session. Institutional desks use crosses for relative value trades, pairing a hawkish central bank against a dovish one, for example long EUR/JPY when the ECB holds rates and the BoJ maintains accommodative policy. Liquidity in minors concentrates during the overlap of the relevant regional sessions: EUR/GBP is most liquid through the London morning, while AUD/JPY peaks across the Tokyo and Sydney overlap. Spreads typically widen at the New York close and during low-liquidity windows.
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Common misconceptions about minor currency pairs
A frequent misconception is that minors are inherently riskier than majors. They are not riskier by category, but they do carry wider spreads and can move sharply when one of the two USD legs moves while the other stays still. Another misconception is that GBP/JPY is exotic. It is a classic minor, often nicknamed the dragon for its range, but both legs are G10 currencies. Traders also assume minors are illiquid overnight. Liquidity does thin outside of the relevant regional sessions, but pairs like EUR/JPY remain tradeable around the clock on most ECN venues.
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Frequently asked
What is the difference between major and minor currency pairs?
Major pairs always contain the US dollar paired against another G10 currency, for example EUR/USD, USD/JPY or GBP/USD. Minor pairs combine two non-USD majors, such as EUR/GBP or AUD/JPY. The functional difference is liquidity and spread: majors carry the tightest spreads and deepest order books, while minors are priced synthetically off the underlying USD legs and typically show wider spreads, particularly outside their natural regional trading sessions.
Are minor currency pairs more volatile than majors?
Volatility depends on the specific pair, not the category. GBP/JPY and EUR/JPY are historically more volatile than EUR/USD because they combine two independent currency drivers, but EUR/GBP and EUR/CHF are often less volatile than most majors due to the close economic linkage between the two legs. Realised volatility readings from any decent platform will show this clearly across a rolling 20-day window.
When is the best time to trade minor currency pairs?
Trade each cross during the overlap of its two underlying regional sessions. EUR/GBP and EUR/CHF are most liquid through the London session. EUR/JPY and GBP/JPY trade best across the London open and during the Tokyo session. AUD/JPY and NZD/JPY peak during the Sydney and Tokyo overlap. Outside these windows, spreads widen and slippage risk rises, particularly around the New York close at 5pm ET.
Why are spreads wider on minor currency pairs?
Dealers construct minor pair quotes from the two underlying USD legs, so the bid-ask spread reflects the combined liquidity cost of both legs rather than a single direct market. EUR/GBP pricing, for example, draws on EUR/USD and GBP/USD order books simultaneously. This synthetic construction, combined with lower direct interbank volume than majors, means minors typically quote one to three times the spread of EUR/USD on most retail accounts.
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