What are Minor Currency Pairs? Minor Currency Pairs Explained for Australian Traders

A minor currency pair is any forex pair that combines two major world currencies but does not include the US dollar — for example, EUR/GBP or AUD/JPY. Most Australian CFD and forex brokers list dozens of minor pairs alongside the major pairs, but the trading conditions, such as spreads and liquidity, can vary quite a bit between them.

How Minor Currency Pairs Work — A Practical Example

Imagine you want to trade AUD/JPY, one of the most popular minor pairs for Australian traders given its connection to the local economy and Asian market hours. You open a position worth A$10,000 notional value, and your broker quotes a spread of 2.5 pips on AUD/JPY. Using a pip calculator, you can work out that on a standard lot this spread costs you roughly A$18–A$22 depending on the exact exchange rate — noticeably wider than the 0.8–1.2 pip spread you might see on EUR/USD.

Because minor pairs do not involve the USD, liquidity in the interbank market is thinner. To convert EUR/GBP, for instance, banks essentially run two trades through USD in the background, which adds cost. That cost flows through to you as a wider spread, which is why monitoring the spread on minor pairs is especially important before you enter a trade.

Why Minor Currency Pairs Matter for Australian Traders

Australian traders have a natural interest in AUD crosses such as AUD/JPY, AUD/NZD, and AUD/CAD, because movements in those pairs are closely tied to commodity prices, Reserve Bank of Australia decisions, and broader Asia-Pacific sentiment. Trading AUD crosses can be a more direct way to express a view on the Australian economy than trading AUD/USD, where US dollar movements can dominate.

Under ASIC’s leverage limits for retail clients, forex major pairs can carry up to 30:1 leverage, while minor pairs are capped at 20:1. This means a A$2,000 margin deposit on an AUD/JPY position gives you exposure to A$40,000 worth of currency — a meaningful difference from the A$60,000 you could control on a major pair with the same deposit. Understanding leverage and its ASIC limits is critical before sizing any minor pair trade.

The quality of execution matters more on minor pairs because the wider spreads mean slippage has a bigger impact on your bottom line. A broker with strong liquidity provider relationships — common among ASIC-licensed ECN brokers — will typically offer tighter spreads and faster fills on minor pairs than a market-maker model broker.

Minor Currency Pairs vs Major Currency Pairs

Major currency pairs always include the USD — think EUR/USD, GBP/USD, or AUD/USD — and they carry the tightest spreads and deepest liquidity in the global forex market. Minor pairs drop the USD from the equation, which means slightly wider spreads and occasionally less predictable price action during off-peak hours. Exotic pairs take this a step further by pairing a major currency with a currency from an emerging market, such as USD/TRY or USD/ZAR, and tend to carry the widest spreads of all. For most Australian traders, the spread and overnight swap rate are the more important factors to check when deciding whether to trade a minor pair versus a major.

What to Check When Comparing Brokers

• Spread on AUD crosses: Look specifically at the live spread on AUD/JPY or AUD/NZD during your typical trading hours — not just the advertised minimum. A tight headline spread that widens significantly at the open of Sydney or Tokyo sessions is a red flag.
• Leverage caps for minor pairs: Confirm the broker applies ASIC’s 20:1 cap for retail clients on minor pairs. Any ASIC-licensed broker must follow this rule; if a broker offers higher leverage to retail accounts, it is not operating under an Australian Financial Services Licence.
• Overnight swap rates: Minor pairs, particularly AUD/JPY, can carry significant swap charges due to interest rate differentials between the two countries. Ask the broker for a swap table or check it in the platform before holding positions overnight.
• Number of minor pairs available: Some platforms list only a handful of AUD crosses, while others such as Pepperstone offer a broad range of minor and exotic pairs with competitive raw spreads on an ECN model.
• Execution model: An ECN or STP broker passes your order to the interbank market, which is typically better for minor pairs. A dealing-desk broker may widen spreads further during volatile periods.

For a broader comparison of platforms that cover minor pairs well, see our guide to the best forex brokers in Australia, where we test spreads across majors and minors on live accounts.

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