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21 May 2008

Exotic currency: Investopedia term of the day

TERM OF THE DAY - MAY 21, 2008
Exotic Currency
What Does it Mean?
A foreign exchange term for a thinly traded currency. Exotic currencies are illiquid, lack market depth and trade at low volumes. Trading an exotic currency can be expensive, as the bid-ask spread is usually large.
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Investopedia Says...
Exotics are not considered major currencies because they are not easily traded in a standard brokerage account. Major currencies include the U.S. dollar, Euro, Canadian dollar and Swiss franc. Examples of exotic currencies include the Thai baht, Uruguay peso or Iraqi dinari...Read more.

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