How it works
It can rise around economic releases, policy decisions, political events and shifts in global risk appetite. Different pairs can have very different normal ranges.
What to check
Use a consistent measure and time horizon when comparing volatility. A pair that looks calm on a daily chart can still move sharply around specific events.
- Define the time horizon
- Compare like with like
- Adjust position risk when volatility changes
Limits and risks
Higher volatility increases both opportunity and risk. With leverage, the effect on account equity can be much larger than the percentage move in the currency pair.
Primary sources
BIS 2025 Triennial Central Bank Survey↗FCA: Contracts for difference (CFDs)↗General information only. Investment products can lose value, and terms, fees and regulation can change.