Title: Top 10 most volatile currency pairs
1Top 10 Most Volatile Currency Pairs and How to
Trade Them
The Forex Secret
2Introduction
The most volatile currency pairs offer enticing
prospects for profit because their price
movements can be more dramatic than less volatile
pairs.
- Volatile pairs are affected by the same drivers
as their less-volatile counterparts. - Volatile currency pairs often have lower levels
of liquidity than their less-volatile
counterparts. - A well-thought-out trading plan and risk
management strategy in place, there is little to
fear from volatile currency pairs.
3List of Volatile Forex Pairs
4AUD/JPY
- The Australian dollar is a commodity currency,
meaning that its price is heavily linked to the
price and volume of Australias exports - Japanese yen is widely considered to be a
safe-haven currency, meaning that investors often
turn to it in times of economic hardship - The price movements of this pair can be very
dramatic depending on the current global economic
outlook.
Inverse relationship between the Australian
dollar and Japanese yen.
5NZD/JPY
- New Zealand dollar is a commodity currency and
its value is closely tied to the price of New
Zealands agricultural exports - Some of the top exports from New Zealand are
dairy, eggs, meat, wood and honey. - As a result, any changes in the price of any of
these markets will affect NZDs value against the
Japanese yen.
Pairing of the New Zealand dollar against the
Japanese yen.
6GBP/EUR
Matching of the British pound against the euro
and, following Brexit
- This pair has seen constant volatility.
- This is particularly true around any key policy
announcements, or any crucial votes in the House
of Commons.
7CAD/JPY
- The yen is seen as a safe haven, and the Canadian
dollar is a commodity currency - Japan is a top importer of oil, which means that
as the price of oil increases, the cost of buying
Canadian dollars with yen also tends to increase.
- This is because as oil prices rise, more yen must
be converted into CAD to buy a single barrel of
oil, with this increase causing the price of
CAD/JPY to rise.
Pairing of the New Zealand dollar against the
Japanese yen.
8GBP/AUD
- A knock-on effect of the US's trade war with
China has been that Australian imports to the
Chinese markets have fallen. - Since China is one of Australias main trading
partners, this does not bode well for Australian
manufacturers and exporters, rely on strong trade
links with China to maximise their profits. - As a result, currency pairs which contain AUD
have seen increased volatility since the start of
the trade war.
Pair is comprised of the British pound and the
Australian dollar.
9USD/ZAR
- Volatility in this pair is greatly affected by
the price of gold. - Because gold is one of South Africas main
exports, and gold is priced in US dollars on the
world market which means that the price of gold
is strongly correlated with the strength or
weakness of USD. - As a result, if the price of gold is rising, the
price of the dollar will likely also increase
against ZAR.
Sets the US dollar against the South African rand
10USD/KRW
- The South Korean won, in its current form, was
formed after the separation of the Korean
peninsula into two separate parts following the
Second World War.. - Following the separation, the South allied with
America and the North allied with Russia. - As a result, the economic disparities of
capitalism and communism started to become
apparent and can still be seen on the peninsula
today.
Pair is the US dollar against the South Korean
won.
11USD/BRL
- This pair enjoys frequent price movements,
creating opportunities for traders who focus on
day trading or even scalping. - As an emerging market, Brazil is an exciting
economy for those seeking to capitalise on the
forecasted future development of the South
American country. - However, politics in Brazil has been unstable at
times, with corruption dominating headlines in
the last decade or so.
Pair is the US dollar against the Brazilian real.
12USD/TRY
- 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. - Turkish politics remains highly unstable, with
many still supporting the Peace at Home Council - Because of the uncertainty surrounding the
current outlook for the lira, USD/TRY is a key
pair to watch for any forex traders seeking a
highly volatile pair
Encompasses the US dollar and the Turkish lira
13USD/MXN
- 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. - The current tariff rate of 20 has already caused
volatility in this pair to increase, with
announcements surrounding the immigration
policies of the Trump administration tending to
have an adverse effect on the peso.
Puts the US dollar against the Mexican peso
14How to Trade Forex Volatility
- Research which forex pair you want to trade
- Carry out analysis on that forex pair, both
technical and fundamental - Choose a forex trading strategy and check youre
comfortable with your exposure to risk - Create an account and deposit funds
- Open, monitor and close your first position
Five simple steps
Two of the most popular ways to trade forex
volatility or volatility in general is by
opening a CFD or spread betting account.
15THANKS FOR YOUR INTEREST