most volatile currency pairs

The high liquidity of these pairs means that they have the tightest spreads and virtually no slippage due to their large trading volumes. Therefore, these trading assets are best suited for scalping strategies. Other exotic currency pairs with high historical volatility are the ones that include the Mexican peso and the Israeli shekel. In the foreign exchange market, the high volatility of forex pairs gives a lot of trading opportunities and can lead to greater gains, as well as more significant losses. Volatility refers to the frequency and amplitude of price fluctuations.

Popular times to trade EUR/USD – IG

Popular times to trade EUR/USD.

Posted: Mon, 04 Sep 2023 12:56:36 GMT [source]

Individually, the two are some of the world’s most traded currencies. As a pair, however, it is not uncommon for their quoted prices to rally 300 and 500 pips daily, which explains its inclusion among the most volatile forex pairs to trade today. Also remember that the volatility of currency pairs in

Forex noticeably increases when the American and European trading sessions

coincide. This is because foreign investors, reshuffling their investment

portfolios and getting ready to invest in American securities, convert their

national currencies.

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Also, major news about economic changes or government policies will affect investors’ sentiments. For instance, when the COVID pandemic started, this triggered an increase in the market’s volatility. This pair tends to move up and down together because both countries use the same currency.In addition, Switzerland is one of the world’s largest exporters of goods and services.

  • The US Dollar and Swiss Franc tend to strengthen when investors are risk-averse, but they may not deviate much from each other.
  • Investors turn to these in times of hardship for financial security.
  • When trading this volatile currency pair, you will need to pay attention to news and events about both Japan’s and Australia’s economies.
  • Every country has its currency, with its exchange rates for foreign currencies.

Outbreaks are expected to be contained, and the złoty is forecast to rise as risk appetite improves in 2021. One of the most popular ways to trade forex volatility – or volatility in general – is by opening a CFD account. CFDs are financial derivatives, meaning that they afford you the ability to go long to bet on the market rising, as well as short to speculate on it falling. It lets beginner traders make money by copying the trade settings of popular investors while letting expert traders earn 20% of all profit made from their copied trades. Some of the factors that make eToro stand out among the best forex trading platforms include the fact that it maintains a smooth client onboarding process and a highly intuitive trading interface.

Top 5 Most Volatile Currency Pairs in 2022

Volatility tells you how drastically a certain currency has moved within a timeframe. This helps you adjust your trading systems and trading times to perfectly suit your trading style. Usually, a Forex trader looking for low and steady returns and less risk would prefer to trade low volatility pairs.

most volatile currency pairs

This is due to the weak economies which are unstable and cause the volatile fluctuation of the local currency. The major pairs which are the most traded and are of the most volatile currency pairs strongest economies have a lower volatility as they have stable and strong economies. Exotic forex pairs can provide you with an opportunity to diversify your trading.

What is volatility in Forex trading

The currency tends to perform better when markets are in “risk-on” mode. However, this will also make it more expensive to buy US dollars with South African rand. Because of this, traders who are interested in the USD/ZAR pair should carry out sufficient analysis on the price of gold and the factors which affect its price before opening a position.

most volatile currency pairs

The falling value of Australian exports is weakening its correlated relationship with GBP. One of the frequently used tools for trading on short-term fundamental volatility is the Nonfarm Payrolls report. You can find out how to make money on it in the article What is the Non-Farm Payrolls Report in Forex. Brokerage services in your country are provided by the Liteforex (Europe) LTD Company (regulated by CySEC’s licence №093/08).


Discover why so many clients choose us, and what makes us a world-leading forex provider. On January , a day after Bolsonaro was sworn in as president, the real dropped 2.63% against the dollar, followed by 1.08% the following day and 1.07% the day after that. Based on all three diagrams, we can conclude that volatility tends to change during any period. To illustrate the non-constant nature of volatility, let’s look at the Forex Volatility Calculator. We should note that, by definition, volatility tends to change over time and is not a constant.

Some of the commodities influencing the New Zealand dollar’s value include livestock, dairy, meat, and wood – the island nation’s key exports. Given its rich trade relations with Australia and China, the NZD/JPY pair prices are heavily influenced by the economic performance and political environment in the two countries. Throughout the year, the Japanese Yen has been on a losing streak – having dipped close to 30% against the US Dollar.


Highly-volatile currencies tend to change price more often than those with low volatility. Because they move more frequently, high-volatility currency pairs are riskier to trade than low-volatility currency pairs, hence the need for FX currency protection at the onset. Throughout this forex investing guide, we have discussed 10 of the most volatile forex pairs to trade in 2023. We have told you they can be traded and looked at some of the factors influencing their price action. But even more importantly, we introduced you to two of the most popular and highly reputable zero-commission forex brokers.

Like AUD/JPY, the New Zealand Dollar against the Japanese Yen can also be volatile. The NZD is backed by a commodity-based economy that entails agricultural produce export. The price of these commodities often affects the exchange rate of  NZD against safe haven JPY. If the vote comes and goes, and the currency pair doesn’t move higher, the trader can keep the short GBP/USD trade and make profits as it falls lower still.

  • USDCHF is often volatile because it has the lowest liquidity level of the top four major currency pairs and is the least traded.
  • According to the calculator, the most volatile pairs are GBP/NZD, USD/JPY, and AUD/USD; exotic pairs are USD/ZAR, USD/BRL, USD/SEK, and USD/RUB.
  • Such pairs should not have sharp price jumps, deep drawdowns, or abnormal peaks.
  • Exotic currency pairs are a combination of emerging market currency pairs and advanced economy currencies.
  • Brokerage services in your country are provided by the Liteforex (Europe) LTD Company (regulated by CySEC’s licence №093/08).

The degree of volatility shows the state of the market at different points in time. If there is a significant rise in interest from bulls or bears, volatility rises. Such interest leads to increased risks and more trading opportunities.

Most Volatile Currency Pairs Summary

Japan exports manufactured goods to its Canadian trading partner, while Canada supplies Japan with natural resources. This is especially true when we see any key policy statements made in Britain. Changes in the price of this currency pair depend on the economic condition of the UK and EU economies, their trade relationships, and inflation rates.