Chapter 9

Minor Currency Pairs and Cross-Currency Trading

In This Chapter

arrow Branching out beyond the majors

arrow Getting to know the minor dollar pairs and the Scandies

arrow Finding opportunities in cross-currency trading

arrow Understanding how cross-currency trading affects the overall market

Trading in the major currency pairs accounts for the lion’s share of overall currency market volume, but speculative trading opportunities extend well beyond just the four major dollar pairs (currency pairs that include the USD). For starters, three other currency pairs — commonly known as the minor or small dollar pairs — round out the primary trading pairs that include the U.S. dollar. Still more trading options are available in the currencies of Scandinavian nations that haven’t adopted the EUR, referred to as the Scandies. Then there are the cross-currency pairs, or crosses for short, which pit two non-USD currencies against each other.

In this chapter, I take a closer look at the minor currency pairs, Scandies, and cross-currency pairs to see how they fit into the overall market and offer an additional ...

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