Most Volatile FX Pairs In 2023 Reviewed

In this guide, we will discuss the 10 most volatile FX pairs in 2023. We will be looking at the factors influencing their volatile price action, understand how they are traded, and tell you the safest fx brokerages where they can be traded.

By most volatile forex pairs, we refer to tradable currencies with the most erratic price action. And we would like to start by observing that these often fall within the minor and exotic categories of FX pairs. These often record low and inconsistent trading volumes, which make it possible for their buyers and sellers to push quoted prices up or down.

Read on to learn more about the 10 most volatile FX pairs in 2023.

Top 10 Most Volatile FX Pairs To Trade In 2023

After a careful analysis of the price and trade volumes for different currency pairs using multiple standard deviation metrics, our experts concluded that the following are the most volatile forex pairs to trade in 2023.

 

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Below, we discuss each of these volatile forex pairs in detail. We will explore their volatility levels and the factors influencing their volatile price action.

Most Volatile FX Pairs In 2023 Reviewed

One of the advantages of trading the most volatile forex pairs is that they present you with an opportunity to make outsized and often quick profits. In this post, we will discuss 10 such opportunities as we explore currency pairs with the most erratic price action.

1. GBP/NZD – Overall Best Volatile Pair For FX Trading

The GBP/NZD currency pair pits the British Pound – one of the world’s key reserve currencies – against the New Zealand Dollar – the currency for the island nation of New Zealand. 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.

Britain is one of the largest economies in the world, and London is considered one of the largest financial centers in the world – both of which draw a lot of attention to the Pound. The New Zealand Dollar, on the other hand, is closely correlated to dairy commodities as well as the Chinese and Australian economies – mostly due to the close proximity and deep trade ties between the three countries.

Some of the factors influencing the FBP/NZD price action and which you ought to consider when trading the pair include the GDP growth of Britain, New Zealand, China, and Australia. Others are the price of New Zealand’s leading export – dairy products and news/events about the economy of these countries.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

2. GBP/AUD – Highly Volatile Minor Pair With High Liquidity

The GBP/AUD currency pairs two of the world’s largest economies – Britain and Australia. They are some of the most traded currencies but also one of the most volatile fx pairs to trade today. And unlike most other fx pairs on this list, the two are closely related because they are part of the Commonwealth.

Historically, the price of the British Pound is largely influenced by the health of the British economy. The value of Aussie is, on the other hand, largely influenced by the value of Australia’s leading export commodities, especially iron ore and coal.

We observe that in the recent past, Australia has been engaged in a direct trade war with China, the largest import market for their commodities. It has also been caught up in the extended US-China trade war that saw the communist nation cut down on the level of imports from Australia. And all these have had a massive impact on the value of the Australian Dollar.

When trading the GBP/AUD pair, you will need to pay close attention to such factors as the price of Iron and coal commodities. You will also need to consider the economic performance of the UK, China, and Australia because they have a direct impact on the currency pair’s price action.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

3. AUD/JPY – Commonly Traded Currency Pairs

The AUD/JPY sets two of the most commonly traded currencies in the world against each other. The Japanese Yen is considered a safe haven and is also one of the most traded currencies in Asia. On the other hand, the Australian Dollar is hugely correlated to the commodities market as well as China’s – the largest economy in Asia.

Throughout the year, the Japanese Yen has been on a losing streak – having dipped close to 30% against the US Dollar. The trade wars between China and Australia, as well as between China and the US, have - on the other hand - affected Australia’s exports to China which greatly impacts the value of AUD. Both factors have contributed to the massive volatility being witnessed by the JPY/AUD currency pair today.

When trading this volatile currency pair, you will need to pay attention to news and events about both Japan’s and Australia’s economies. You will also need to check China’s economic growth and the price of commodities., You also need to carefully analyze the impact of political/economic tensions between China, the US, and Australia.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

4. USD/TRY – Volatile Currency Pair With Moderate Liquidity

Over the past few years, the USD/TRY currency cross went from being a moderately traded and relatively stable pair to one of the most volatile fx pairs. And this is evidenced by the fact that in the last five years, the Turkish Lira has depreciated by more than 600% against the US Dollar.

The tumble started immediately after the failed coup d’état in 2016 that plunged the country into a political crisis and caused massive disruptions to its economy. What followed was a series of purges against political opponents and rebels by Erdogan’s government in a move that further compromised the country’s economy. A series of other factors, including the Covid-19 pandemic and the ongoing Russia-Ukraine war, have only served to weaken the Lira further and trigger untamed volatility for all TRY currency crosses.

If you are looking to trade the USD/TRY pair, you will want to watch the country’s political environment. You will also need to note that Turkey is witnessing some of the highest inflation rates in the history of the country – breaking above 80% in September 2022. You will also need to observe US economic growth and that of the EU – Turkey’s largest export market.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

5. USD/MXN – Highly Volatile Major Pair

We feature a major currency, the USD/MXN pair our list of most volatile forex pairs to trade in 2023 because of its contradictory volume dynamics. Its price action tends to be relatively moderate in the morning - during market opening hours.

It is also relatively moderate when there is a lot of actionable news about the Mexican or US economies. But the pair’s buy and sell price turns erratic as soon as the market calms down and trading volumes reduce.

When trading the USD/MXN pair, understand that the value of the Peso is deeply tied to the country’s exports - especially oil. Most oil and natural gas-related news will, therefore, have a huge impact on the USD/MXN currency price. The economic performance of the USA will also have a great impact on the pair prices, not just because it is the base currency but also because virtually all of Mexico’s exports are quoted at USD rates in the international markets.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

6. USD/RUB – Highly Liquid Exotic Pair

Even before the Russian invasion of Ukraine, the USD/RUB was one of the most volatile currency pairs to trade. Note that the Russian Rubble is heavily correlated to oil and natural gas; thus, its price action has thus been highly volatile.

This volatility, however, peaked towards the end of the first quarter of 2022 – right after the Russian invasion of Ukraine. At the time, the global community imposed multiple sanctions against Russia and its financial institutions, effectively sending the Rubble into a freefall. But Russia has successfully circumnavigated the embargoes and helped stabilize the currency by forcing all its oil and gas importers to pay in Rubble.

But the war rages on, the sanctions remain, and the Russian financial market is still closed to the rest of the world. On the other hand, the US Dollar has also recorded massive gains against the rest of the world currencies, mostly due to the ongoing monetary policies adopted by the FED to curb inflation in the US.

When trading the USD/RUB forex pair, you will need to pay close attention to such factors as fluctuating oil prices. You also need to monitor the news and events about the OPEC+ block – like the recent agreement to cut down on oil production. Further, observe the US economic performance as well as the rising political tensions between Russia and NATO.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

7. GBP/JPY – Most Traded Minor FX Pair

The GBP/JPY cross pits two of the largest economies and powerful currencies against one another. It is also one of the most traded minor currency pairs and has, for the longest time, been categorized among the most volatile forex pairs to trade in 2023.

The wild price swings recorded by this currency create many opportunities for active currency traders to make a killing trading the pair. They especially like trading it on high-leverage brokerages because the low-interest rates associated with the JPY allow traders to apply the carry trading strategy.

When trading the GBP/JPY trading pair, nevertheless, consider such factors as the economic performance of both the Japanese and British economies. You also need to monitor the global economy as it affects the value of the YEN – considered the safe haven currency.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

8. NZD/JPY – Deeply Liquid Minor Forex Pair

The NZD/JPY cross is a commonly traded minor currency pair pitting two of the largest economic giants in the pacific – Japan and New Zealand. The Japanese Yen is one of the most sought-after safe haven currencies, while the New Zealand dollar is heavily correlated to commodity prices. And these make the pair one of the most volatile and deeply liquid minor currencies.

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.

The commodities market has been experiencing massive disruption. There has also been a lot of tension between China-US and Australia-China lately. And they all have contributed to the growing erraticness of the NZD/JPY prices being witnessed today.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

9. CAD/JPY – Volatile Currency Pair Closely Associated With Oil Prices

The CAD/JPY pair indicates how much Japanese Yen you need to buy the Canadian Dollar. And the two are closely related because of their over-dependence on oil - Canada being one of the largest exporters and Japan being a large importer.

The value of this currency pair is, therefore, highly correlated to oil prices. It is also affected by the performance of the global economy, seeing that the Japanese Yen is considered a safe haven in times of political and economic turmoil.

Since the beginning of the ongoing Russia-Ukraine war, global oil prices have been posting turbulent price performances. Similarly, rising political tensions and an underperforming global economy, as evidenced by run-away inflation in most countries, have seen investors start searching for safe-haven assets.

These have spooked the already turbulent CAD/JPY price action. And this explains why we feature it among the most volatile forex pairs to trade in 2023.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

10. USD/ZAR – Currency Pair Closely Associated With Gold Prices

The USD/ZAR pair features the US Dollar and the South African Rand and joins the growing list of commodity-influenced forex pairs on our list of most volatile fx pairs in 2023. Its price action is massively hinged on the value of gold - South Africa’s leading commodity export.

Like all other US-denominated currency pairs, the USD/ZAR is also heavily influenced by the value of the greenback. First, it is simply influenced by the USD prices because the pair has the USD as its base currency. But it is also influenced by the value of the USD because gold is priced in US Dollars at the international markets.

When trading this currency pair, therefore, you will need to pay key attention to the performance of the global economy - since gold is considered a safe haven asset. You will also need to monitor economic growth for both South Africa and the United States.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

How To Trade Volatile Forex Pairs

Forex trading refers to the art of simultaneously buying and selling currencies. Take, for example, the CAD/JPY forex pair that we have discussed above. Here, the Canadian Dollar is the base currency while the Japanese Yen is the quote currency.  

So, when you “BUY” the currency pair, you are ideally selling the quote currency, which is the Japanese Yen and buying the base currency – which is the Canadian Dollar. Conversely, a “SELL” order for this currency pair would imply selling the base currency – that is, the Canadian Dollars – and effectively buying the quote currency – which is the Japanese Yen.

Note that these currency trades for retail investors are primarily facilitated by online forex brokerages. And they are quoted based on their ‘BID’ (BUY) and ‘ASK’ (SELL) prices.

The bid price, in this case, refers to the price your preferred forex broker is willing to buy the base currency from you in exchange for the quoted currency. The Ask price, on the other hand, refers to the price at which the broker is willing to sell you the base currency in exchange for the quoted currency.

Here is an illustration:

Let us assume you wish to trade the CAD/JPY currency pair that has a quoted bid price of 106.99 and a quoted ask price of 106.96 on your preferred forex brokerage. This means that you need to ¥106.99 to buy one CAD on the brokerage. Conversely, the broker is ready to sell you one CAD for ¥106.96.

Your broker will then impose a small charge to facilitate the transaction – widely referred to as the spread. They will also have minimum buy and sell limits, often expressed in the form of lot sizes (a lot refers to 100,000 units of currency). These limits are usually a standard lot (100,000), a mini lot (10,000), a micro lot (1,000), and a Nano lot (100).

Most brokerages will also let you margin trade these currencies – implying that you only need to raise a fraction of the required trade amounts, and the broker will loan you the rest.

What Factors Influence The Volatility Of A Forex Pair?

Volatility is the measure of the price fluctuations for a particular currency or currency pair over a given period of time. Throughout this guide, we have been discussing some of the most volatile forex pairs, i.e., currencies with some of the wildest price swings.

But what causes such wide price fluctuations for these currencies? We discuss the top five factors influencing the volatility of currencies:

• Political factors: Political instability at both the local and global scale has a huge impact on the value of a country’s currency. The Russian Rubble has, for instance, recorded some of the most devastating losses in history – attributable to Russia’s invasion of Ukraine.
• Monetary policies: News about changes in a country’s monetary policies will also have a significant impact on the value of its currency. These changes may include changes in tax rates/policies, lowered reserve ratio for banks, and sale/buy-back of government bonds and securities.
• Inter-governmental relationships: Both economic and political relationships between two governments will also affect their currency prices. The ongoing trade wars between China and US or China and Australia have, for instance, caused massive volatilities for all the involved currencies.
• Economic performance: A well-performing economy will raise the value of its currency. An inflation-ravaged economy will, on the other hand, have its currency price dip – case in point in the national currencies of Zimbabwe, Venezuela, and Lebanon.
• Price of correlated assets: The value of a currency will also be greatly affected by the value of its correlated asset – particularly its country’s primary exports and imports. In the above guide, we have outlined how the value of different commodities affects the value of different currencies.

Where To Trade Volatile Forex Pairs – Safest FX Brokers Reviewed

It is not enough to learn of the most volatile fx pairs to trade today, how they are traded, or the factors influencing their price action – and your trading decision, by extension. Making money when forex trading starts with the choice of a good and reliable forex brokerage.

If you are looking to start trading forex today, we recommend registering a trader account with either of the following reliable and multi-regulated forex trading platforms.

• Capital.com – Zero commission broker with an AI-integrated platform

Capital.com is a pure-CFD online trading platform that lists 130+ currency pairs. These include all the volatile currency crosses we have discussed above and a wide range of Major, Minor, and exotic pairs.

Some of the factors that make it a top choice forex brokerage include its highly competitive spreads, ultra-fast transaction processing speeds, and low trading minimum limits – 0.01 LOTS. Additionally, Capital.com supports a wide range of deposit/withdrawal methods, has an affordable minimum deposit limit of $20, and gives retail traders access to leverages of up to 1:30.

We must also add that Capital.com doesn’t charge deposit/withdrawal processing fees and that the overnight fees for their margined trades are variable and highly competitive. The FX broker is also regulated by virtually all the top-tier financial regulators, including the FCA, NRRB, CySEC, and ASIC.,

But even more importantly, we consider it one of the best places to trade the most volatile FX pairs today because it integrates AI (artificial intelligence) into its trading platform. It comes in handy in trade bias detection and in helping you understand your trading behavior better. Not forgetting that it is a multi-trader platform available as an app, web trader, trading view, and MT4.

• eToro – Zero commission broker with copy/social trading tools

eToro is one of the most popular and reputable forex trading platforms. It is available in 100+ countries and has onboarded more than 25 million online traders in the recent past. And here, you get access to 49 currency pairs, including some of the most volatile majors, minors, and exotics.

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. You only need to deposit a minimum of $10 on eToro, and the broker supports a wide range of both deposit and withdrawal options.

The exchange then maintains variable but highly competitive spreads and overnight fees for margined trades. Retail traders will also have access to leverages of up to 1:30 and an affordable trade minimum of 0.01 lots.

eToro is also a multi-regulated trading platform licensed by arguably all the top-tier financial regulators globally. These include the FCA, SEC, ASIC, and CySEC. Not forgetting that the multi-platform brokerage maintains some of the fastest transaction processing speeds.

But we include it here primarily due to the integration of copy and social trading tools into its ecosystem. Through social trading, fx traders using the brokerage can interact with and learn from one another.

Copy trading, on the other hand, lets traders earn passively. 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.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Conclusion – Most Volatile FX Pairs In 2023

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.

Want to jump straight to trading these currency pairs? Start by registering an fx trader account with either forex brokerage, making a deposit, deciding the volatile pair you want to trade, and start buying/selling.

eToro – Best Place To Trade Forex

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

FAQs About The Most Volatile Forex Pairs In 2023

Which is the most volatile forex?

There is no standard rating system for grading fx pairs according to their volatility – primarily because their volatility is massively unpredictable. In the above post, however, we have discussed 10 of what we consider the most volatile forex pairs in 2023.  

Which is the most traded currency pair?

The most popular and commonly traded forex pair has to be the EUR/IUSD pair. It accounts for as much as one-third of the total daily forex trades. It is also one of the least volatile fx pairs to trade today.

How do you measure volatility in forex pairs?  

You determine the volatility of a forex pair using different standard deviation tools which compare the frequency and extent of price changes of the particular currency pair over a specific period of time.

How much do you need to start trading forex today?

It all depends on the deposit/trading minimums set by your preferred forex broker. eToro and Capital.com, for instance, have minimum deposit limits of $10 and $20 – respectively. But they both have a minimum trade limit of 0.01 lots.

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