Currencies & Pairs in forex
Every currency has its own fundamental personality: what drives the US dollar is not what drives the yen or the Australian dollar. Two currencies’ fundamentals combine into the pair you actually trade.
These guides break down the major currencies and pairs, the data and themes that move each one, and how to read a pair as the contest between two economies.
Guides
8 in-depth guides on currencies & pairs.
The Australian Dollar (AUD): The Risk-On Commodity Currency
The Aussie is the market's risk dial. It rises when commodities, China and global growth are firing, and falls hardest when risk turns. Read it as a high-beta bet on the global cycle, not just on Australia.
The British Pound (GBP): What Drives Sterling
Sterling is a high-beta bet on UK rate expectations with a credibility problem attached. It rallies hard when the Bank of England turns hawkish, but a twin deficit and a jumpy gilt market mean confidence can drain just as fast.
The Canadian Dollar (CAD): The Oil-Linked Loonie
The loonie is tied to two things above all: the price of oil and the health of the US economy. USD/CAD is less a risk barometer than a North American relative-value trade, where one side often cancels the other out.
The Euro (EUR): What Drives the World's Second Currency
The euro is the anti-dollar. As the other half of the world's most-traded pair, it often moves on what the Fed does as much as what the ECB does. Here is what really drives the single currency.
The Japanese Yen (JPY): Funding Currency and Safe Haven
The yen is two things at once: the cheapest funding currency in the world and a safe haven that surges in a panic. USD/JPY tracks the US-Japan yield gap almost mechanically, until risk breaks and the whole trade unwinds.
The New Zealand Dollar (NZD): The High-Beta Kiwi
The Kiwi is the Aussie's smaller, twitchier cousin: a high-beta, risk-on commodity currency with thinner liquidity, so it moves further in both directions. Dairy, China and the RBNZ do most of the driving.
The Swiss Franc (CHF): The Safe-Haven Currency
The franc is built to rise in a panic. A current-account surplus, rock-bottom inflation and deep credibility make it a magnet in risk-off shocks, which is exactly why the SNB is the most interventionist central bank among the majors.
US Dollar (USD): What Drives the World's Reserve Currency
The dollar sits on both sides of every major trade. It rallies when the Fed is hawkish and the US economy runs hot, and it rallies again when the world is scared. Here is what actually drives the world's reserve currency.