5 Most Volatile Currency Pairs In 2024

Forex trading volatility is the degree to which the price of a currency pair varies over time.

A volatile market is sometimes appealing to traders because of the potential profit. The higher the volatility, the greater the price swings and possibilities to make significant returns. However, this also involves higher risks.

5 Most Volatile Currency Pairs

1. AUD/USD

Beside fluctuating demand (mainly from the Asian market), these products are vulnerable to natural disasters. Tsunamis and earthquakes can affect manufacturing facilities, logistic depots, and shipments, which can shake AUD's value.

2. GBP/USD

British pound sterling and USD account for 16% of all FX swaps in the UK. 

For example, interest rates or quantitative easing (QE) measures can impact investor confidence and economic expectations, and subsequently the GBP.

3. EUR/GBP

Two of the most regularly traded currencies have become a highly volatile currency pair since Brexit.

With the future economic relationship between the EU and the UK no longer inextricably linked, price fluctuations have significantly increased.

4. CAD/USD

Canada is a major producer and exporter of oil, so oil prices play a great part in the strength of CAD. On the other hand, the American economy is more diverse and doesn't depend so heavily on a single commodity or industry.

5. NZD/USD

These can be impacted by changes in global demand and climate patterns that affect crop yields. This is in contrast with the diverse American economy that encompasses a broader array of industries.

» Not sure what are exotic currency pairs in forex trading?

Finding Possibility in Forex Volatility

Volatility in foreign exchange currency pairs presents possibilities for seasoned and well-informed investors to make profits. But it can also very easily lead to losses.

By staying informed about the market through financial communities such as Fortrade, you could potentially increase your chances of making good trades.