Best Currency Pairs to Trade at Night What You Need to Know

Exotic currency pairs are considered the most volatile forex pairs. Trading volatile pairs in Forex, you need to keep reviewing you trading strategy all the time according to the market conditions. This is because steep surges in the exchange rate might lead to serious losses or decrease the efficacy of your trading.

The previous years have been unusually volatile ones for currency traders. The worldwide pandemic shock, its unprecedented economic impacts and resulting stimulus measures, the hotly contested U.S. election, and dramatic commodity price swings have rocked the forex market. This volatility presents both an extra risk and the possibility of extra rewards for the savvy trader. None of the blogs or other sources of information is to be considered as constituting a track record. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice.

forex most volatile pairs

As a result, the economic disparities of capitalism and communism started to become apparent and can still be seen on the peninsula today. Please note, placing contingent Orders does not necessarily limit your losses to the expected amount, as market conditions may prevent you from executing such orders. Stellar, Ripple, Ethereum, and Bitcoin are among the most volatile cryptocurrencies.


Another reason for the volatility is the Mexican higher interest rate compared to the US, which maintained a lower rate. Lastly, the Mexican economy is backed by oil acy securities review export, as such fluctuation in oil price greatly affects MXN. Access our latest analysis and market news and stay ahead of the markets when it comes to trading.

In highly liquid markets prices are the most efficient as the spreads are tight and volume is large. What’s more, liquidity helps decrease the chances of price slippage. One more reason why exotic currency pairs are volatile is that they lack liquidity. And when there’s not enough participation, the distance between limited orders increases, causing prices to make sharp jumps. 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.

Major forex pairs are often the most traded currencies amongst beginners. 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.

forex most volatile pairs

According to some economists, Biden plans to penalize Turkey for their purchase of an air defense system from Russia. The currency pair hit all-time highs before the election and has sold off significantly in the following days. For more information about the FXCM’s internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms’ Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here. The combination of runaway inflation and economic contraction brought significant action to the GBP. Additionally, the dramatic predictions from the BoE itself didn’t promote stability in the pound sterling.


GBP/USD is short for the British pound and U.S. dollar currency pair, or cross, showing how many U.S. dollars are needed to buy one British pound . The Swiss franc is the safe haven of foreign currencies, and USD/CHF is the abbreviation for the currency pair of the United States and Switzerland. The foreign exchange, or Forex, is a decentralized marketplace for the trading of the world’s currencies.

forex most volatile pairs

The British Pound is a highly liquid, yet highly volatile currency. When trading such currencies, it’s important to take into account volume. An increase in volume usually happens at breakout points and they usually predict upcoming sharp moves. The primary difference between high and low volatility pairs is that volatile pairs normally gain/lose more pips over a certain time period, thus they are riskier to trade. Moreover, frequent price moves are more likely to result in slippage. Trading pairs with low volatility may sound less risky but is an obstacle in the way to large profits.

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Largely speaking, volatile pairs are affected by the same drivers as their less-volatile counterparts. These include interest rate differentials, geopolitics, the perceived economic strength of each currency’s issuing country, and the value of these nations’ imports and exports. CFDs are leveraged products and as such loses may be more than the initial invested capital.

The foreign exchange market, or forex, is a global decentralized market. Optimal times to trade the forex market are when the market is most active, which is often when the trading hours of major regions overlap. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Price movement on the Price Surprises page is defined in terms of the number standard deviations a contract has moved in the latest trading session. Defining price movement in terms of standard deviations is preferable to using percentage change because using standard deviations puts all the forex contracts on a level playing field.

  • The price can drastically move against your trade position in a brief period.
  • Japanese yen – Historically, the Japanese yen has proved on multiple occasions its ability to rise from the ashes of market volatility and uncertainty.
  • Both currencies will have exchange rates on which the trade will have its position basis.
  • This is particularly true around any key policy announcements, or any crucial votes in the House of Commons.
  • Trading in CFDs carry a high level of risk thus may not be appropriate for all investors.

Some currency pairs are more liquid than others, which in theory makes them easier to trade. It also means that highly liquid instruments are generally more heavily traded. Below you will find information on the most popular currency pairs with the highest trading volumes. To see a full list of currency pairs that we offer, along with their minimum spreads and margin rates, visit our page on forex trading​​. There are many official currencies that are used all over the world, but there are only a handful of currencies that are traded actively in the forex market.

Upon the onset of trade in August, the DXY stood at levels not seen since 2002. The fact is that various methods of technical analysis might not work in such situations. If you decide to trade, say, USD/SEK or GBP/NZD, your analysis may not work as effectively as, for example, when trading EUR/USD. These diagrams show the average daily volatility of the NZD/USD pair since July 1. 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.

Differences in the two currencies

However, traders should be aware that even the most liquid instruments can become highly volatile under certain conditions. Moreover, economic factors like the Fed’s Interest Rates decision, inflation, monetary policy changes, and geopolitics can affect this pair.Click here to start trading CFDs on EUR/USD now. The volatility of a currency pair refers to the frequency and size of its price change over a certain period. Trading volatile currency pairs is potentially profitable, but also tricky. As a beginner forex trader, you should know how to identify volatile currency pairs and drivers of volatility to safely trade volatile currency pairs.

Altogether, the EUR exhibited consistent volatility across the majors. The underpinnings for this action are diverse but include ECB policy and higher energy prices. Read on to learn more liteforex review about five of the most volatile currencies of 2022. While exotic and developing economy monies frequently exhibit erratic price action, this article will focus largely on the majors.

Whereas with these volatile pairs, one bad news announcement could obliterate your trading position and raise a margin call. Fundamentals play a significant part in all of the forex market, but when it comes to volatile pairs – you HAVE to be focused on it. The US Dollar against the Brazilian Real is volatile due to frequent price movements between the pair. The Brazilian Real is very volatile because it is backed by an emerging economy that is quite unstable. Brazil also has a commodity-backed economy, and its currency value is affected by the demand for commodities. The Australian Dollar against the Japanese Yen can be very volatile due to the negative relationship between the currencies.

As a result, it’s important to carefully research and analyze the markets before making any trades and to use risk management techniques to protect your capital. This means that Forex pairs that were once strong can depreciate following economic changes. However, there are some currency pairs whose value tends to remain stable or appreciated during times of economic instability. The foreign exchange market is the largest and most liquid market in the world. It offers exchanges between any two nation’s currencies and includes major, minor and exotic currencies. The result is a market that offers hundreds of possible currency pairs to trade.

More recently, a series of tariffs have been implemented on Mexican exports to the US, as well as a series of threats against Mexican immigrants trying to get into the US via its southern border. Turkish politics remains highly unstable, with many still supporting the Peace at Home Council – the group behind the failed coup. This instability was reflected in the fact that the lira fell following heavy losses to President Recep Tayyip Erdoğan’s AK Party in elections held throughout 2019. This was exacerbated by the election of Jair Bolsonaro – a far-right populist – to the presidency in January 2019. On 2 January 2019, 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.

A currency pair might be trending strongly one year and be completely trendless the next year. Still, it is possible to compare the trendedness of currency pairs based on a set of metrics to get a better understanding of which currency pairs trend the most and also how exactly they trend. The present guide provides an updated review of the most trending currency pairs in 2021. Additionally, it also provides a script that you can use to calculate trend statistics for any set of trading instruments and timeframes. With higher activity, trading spreads, or the differences between bid prices and ask prices, tend to narrow.

Upon completing this list, you’ll have a good idea of where the action was in 2022 and where it may be in 2023 and beyond. FXCM is a leading provider of online foreign exchange trading, CFD trading and related services. We recommend that you seek independent financial advice and ensure you fully understand the risks involved before trading.

However, there is no reward without risk, neither in forex nor in any other market. The most volatile currency pairs are “exotics,” although few traders choose to trade them because of their unpredictability and high risks. Less but still volatile are AUD/JPY, AUD/USD, EUR/AUD, NZD/JPY, GBP/AUD, GBP/NZD. The least volatile currency pairs are EUR/CHF, EUR/USD, AUD/CHF, USD/CHF, EUR/CAD, etc. To analyze forex volatility, refer to the average true range indicator. There is no ultimate answer to the question of whether one should trade currency pairs with high or low volatility.

Safe havens, like gold and silver, are often regarded as hedges against market instability, but as commodities they can also experience price swings. Typically, energies are the most volatile commodities, while agriculturals tend to experience less dramatic price swings. Please also note the following – past performance are not necessarily indicative of future results. Crypto market volatility is largely driven by news and the opinions of influencers in the crypto space, such as Elon Musk. The crypto market is known for its unpredictable nature, which is what makes it exciting for some traders but daunting for others.