What Are the Most Volatile Currency Pairs?

Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. It’s important to monitor the ongoing political and economic ties between the UK and EU to trade EUR/GBP, as well as the interest rates set by the Bank of England and the European Central Bank. Historically, the value of the yuan has been low compared to the US dollar because the Chinese government has artificially driven down the price to keep its exports competitive on the global market. That’s why the yen is commonly said to be under a ‘dirty float’ regime – as it is a floating currency, but not in the truest sense of the word. So, trading USD/JPY is a means of capitalising on these more regular fluctuations – if you’re able to buy and sell at the right time.

It suffered significantly from inflation due to COVID-19, so its value became record low even back in 2020. In March 2021, the Central Bank of Venezuela issued banknotes with denominations of 200,000, 500,000, and 1,000,000 bolivars. The price for the EUR/USD may be 1.1285, which means it costs $1.1285 to buy €1. If the rate moves down to 1.1238, that means the Euro has decreased in value because it now costs $1.1238 to buy €1.

However, while increased volatility may offer more scope to realise a profit, it can also increase a trader’s exposure to risk. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.

Here we have covered the most volatile currency pairs and strategies for trading volatile pairs in the Forex market. Known as “The Gopher”, this currency pair is one of the most popular pairs amongst traders. This means that traders can buy and sell the currency pair without experiencing significant fluctuations in the exchange rate. This currency pair is known as the “The Fiber”, and it’s the most traded pair in the world. Over 24% of daily forex market transactions derive from this currency pair, which is not surprising given these are the currencies of the world’s two largest economies.

USD/CNY

The more often the currency is traded, the more money you may make trading it. The position size on Forex is measured in lots, where one standard lot is equal to 100,000 units of the base currency. EUR/USD, GBP/USD, and NZD/USD are the best-trending pairs when measuring trends with a moving average on a daily timeframe.

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Correlation between two currencies can also have an impact on their volatility. The more positively two currencies are correlated to one another might lead to less volatility. Continuing with our USD/CHF example, we note that the US Dollar and Swiss Franc are both viewed as safe-haven currencies.

Which Forex Pair Trends the Most – 2023 Data

They include currencies from the world’s largest and most stable economies – some popular pairs include EUR/USD, GBP/USD and USD/JPY. Major pairs are popular among beginner and expert traders due to the high liquidity and low spreads. The United States dollar is the most commonly traded currency in the world, and therefore most major forex pairs include the USD as the base or quote currency. When combined with other currencies from some of the world’s biggest economies, including China, Japan and the United Kingdom, these are seen as major crosses.

CNY is the forex ticker for the Chinese renminbi trading market, but when the yuan is traded offshore, it is referred to as CNH – so on our platform, this pair is listed as USD/CNH. CNH has usually not been as tightly controlled as CNY by the Chinese government, which means it can be more volatile. Strategies that involve profiting from small price movements, such as scalping and automated trading programmes, also may outperform in the Asian markets. As there is less activity, there is less chance of missing a trade on a small fluctuation. The AUD/JPY pair can also offer heightened volatility during overnight trading.

They also display an average weekly, daily, and hourly fluctuations of the pair. TRY has been highly volatile since 2016 following a failed coup d’état and the subsequent ‘purges’ that have been taking place in Turkish society. Adding to this, there has been an economic slowdown following a two-year recession that started in 2015 and caused the economy to contract by 7%.

The Most Volatile Currency Pairs in 2022

You should consider whether you understand how over-the-counter derivatives work and whether you can afford to take the high level of risk to your capital. Investing in over-the-counter derivatives carries significant risks and is not suitable for all investors. The Mexican Peso is one of the most liquid emerging market currencies, but still a volatile one. The oil price has a significant impact on the direction of the currency.

Before developing a ‘Trade the News” strategy, we have to look at which news events are even worth trading. As Singapore is one of the largest financial hubs in Asia, trading the USD/SGD pair is seen as a great way to get exposure to the country’s strong economy and the entire continent. The value of the HK dollar is actually pegged to the US dollar in what’s known as a ‘linked exchange rate’.

Traders can also look at implied volatility readings, which reflect the level of expected volatility derived from options. The US dollar and the Canadian dollar have a strong correlation, due to being fiscal neighbours and important trading partners. More recently, the leading factor to monitor when trading the USD/CNY pair is US-China tensions, which have flared up for a number of reasons over the years.

The value of the Russian Ruble is heavily influenced by the most volatile currency pairs of oil, which is the country’s main export. Changes in oil prices can significantly affect the value of the Ruble. USD/CAD is so popular because of Canada’s strong oil and gold export-oriented economy.

FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results. Minor and exotic pairings can also fluctuate to a higher degree due to lower liquidity and the nature of the respective country’s economic condition.

This news on a safe coin obliterated brokers — FXCM suffered $225m loss+ thousands of clients were margin called heavily in the red. Just like their stable counterparts, they are still affected by the same economic data flows – but the reason they are more volatile could be down to geopolitics and their economic strength. Increased volatility can increase a trader’s risk, but with higher volatility assets – there is also a higher chance of larger profit potential. Traders should note that there are distinct differences that exist between volatility and risk.

Example of a Major Pair Price Quote and Fluctuation

Type in the https://g-markets.net/ criteria to find the least and/or most volatile forex currencies in real time. Trading leveraged products such as Forex and CFDs may not be suitable for all investors as they carry a high degree of risk to your capital. There is, however, one common pattern that frequently emerges in Forex trading which involves what is known as ‘herd mentality. This occurs when traders decide to take a chance on a volatile market due to the influence of other traders who are doing the same. Relative Strength Index – which can be used to measure the magnitude of price changes and may also indicate whether a currency has been overbought or oversold. Historical volatility is that which has already occurred whereas implied volatility is a measure of the expectations of a trader for the future which is based on the price of futures options.

The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

This is seen as a particularly volatile currency pair, due to its frequent fluctuations in price, exchange rate and pip movements. This can result in large profits if the trader is successful, however, it can result in equally great losses when market volatility is at a high. The GBP/USD is particularly favoured by day traders​, who aim to take advantage of price fluctuations by dipping in and out of the market at a quick and precise pace. For this reason, it is also one of the best forex pairs for swing trading​, another short-term forex strategy. It is recommended that those who trade this volatile currency pair strengthen their knowledge of technical analysis of the market before opening any positions.

This pair often enjoys frequent movements which create an array of opportunities for traders to focus on day trading strategies including that of scalping. This currency pair is between the New Zealand Dollar and the Japanese Yen. As with AUD, NZD is also a commodity currency which has its value closely tied with the agricultural exports of New Zealand, which makes this currency substantially volatile. All in all, checking up with the times of increased volatility in Forex, traders who work intraday choose the best time and instruments. When volatility is lower than average, for example, at the border of the European and Asian sessions, an aggressive trader can make a pause and prepare for trades on this or that session.

The yen is seen as a safe haven, and the Canadian dollar is a commodity currency, with its value on the currency market heavily influenced by the price of oil on the commodity market. The first volatile currency pair on our list is AUD/JPY, which represents a pairing of the Australian dollar against the Japanese yen. This pair enjoys high volatility thanks to the inverse relationship between the Australian dollar and Japanese yen.