Which currency pair is more volatile in Forex trading and why?
The most volatile Forex pair is the AUD/JPY pair (Australian dollar/Japanese Yen). The reason behind this volatility is that the Japanese Yen is heavily tied to the U.S. dollar. So, when the U.S. dollar or the U.S. stocks move, the Japanese Yen moves accordingly, while the Australian dollar stays more or less constant. Also, the Australian dollar is closely tied to the commodities market. This also creates a significant amount of volatility.