Volatility can be down to all kinds of factors — from unwelcome trade figures to surprising election or referendum results. More volatility can be something of a mixed blessing — it allows for more opportunities but also for many more risks.

Sterling and the dollar were tricky before the EU referendum and trading was more volatile than usual. Most people did not expect the Brexit result and the result was bigger intra-day price swings.

A currency pair that is well known for its volatility is the pound-yen cross. Unsurprisingly this pair suffered even more volatility immediately prior to the e EU referendum with average daily swings of 1.

Most Volatile Active Traded Currency Pairs

Factors in both countries seem to predicate that in the year ahead we can expect only further volatility from the guppy. The cross between the Euro and the Kiwi New Zealand dollar tends to be unpredictably volatile. It is not unusual to see daily movement in the region of 1.

What Are the Major Forex Currency Pairs and why should you trade them

One can see regular moves of between pips is because the pair is relatively illiquid and the two currencies are composed of two highly liquid pairs — EURUSD and NZDUSD.

This pairing has experienced high volatility — three hundred pips on average over the past year — which to put in perspective is four times the level of volatility for the least volatile pairing. It should be noted that percentages of volatility can vary versus pips because of the different values of pips between pairs.

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There is also marked volatility in the relationship between the pound sterling, still struggling to come to terms with Brexit and the Australian dollar.

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Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you.

Foreign Exchange Volatility | Currency Movement | Forex Volatility Chart | OANDA

Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.

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