Exotic Currency

Gold doubloons. Quatloos. Kalganids. Exotic currencies.

The term refers to currencies that don't see much trading volume on international markets. As a result, they can lack liquidity, which can lead to relatively large swings in value.

The major world currencies include the U.S. dollar, the euro, the Japanese yen, the British pound and the Swiss franc. These represent the furthest thing from exotic currencies. They are the boring currencies...the steak and potatoes of forex trading.

Below those big shots, there's a tier of currencies of smaller countries that still have relatively developed economies and strong financial/monetary institutions. This group includes players like the Canadian dollar, the Australian dollar and the New Zealand dollar.

From there, things start to get exotic. The next tier includes currencies like the South African rand, the Turkish lira, the Hong Kong dollar, the Singapore dollar, and the money used in the various Scandinavian countries...Sweden, Norway, and Denmark (their currencies are known as the krone and the krona, depending on location).

Meanwhile, at the way, way furthest end of the exotic spectrum are the really thinly-traded currencies...only really of interest to people traveling to those locations, or traders with insider knowledge or gambling addictions. We're talking things like the Afghan afghani, the Bahraini dinar, or the Somali shilling.