These Currency Pairs Have the Widest Trading Ranges

12/31/2009 12:01 am EST

Focus: FOREX

Kathy Lien

Managing Director and Co-Founder BKForex LLC, BK Asset Management

With many markets around the world closed for Boxing Day, trading has been extremely quiet. Aside from the Dallas Fed manufacturing activity report, which strengthened in the month of December, there have been no other economic releases on the calendar. Equities hit a new yearly high on news that retail sales have been better than expected this holiday season and receipts at the box office this weekend hit the highest level ever.

Therefore, we take this opportunity to update one of our most heavily requested reports on which currency pairs have the widest trading ranges. Although volatility in the foreign exchange market has contracted over the past year, overall trading ranges can vary by currency pair, and knowing the average trading range for each pair can be very useful for forex traders because it can help determine their “tradability.” To be more specific, for traders who cannot stomach volatility, a pair like EUR/CHF may be more appropriate because of the comparatively smaller average daily trading range. For traders who thrive on trading the “Googles” of the currency market, meaning the currency pairs with wide trading ranges, then a pair like EUR/NZD may be more suitable.

We have sorted the 24 more actively traded currency pairs by their average daily trading range in pips. Please remember that each currency pair has a different pip value, so a 100-pip move in EUR/GBP is more significant in dollar terms than a 100-pip move in the NZD/USD. The average daily trading ranges are calculated from the beginning of 2009 to the present. We have also included a chart comparing the 2009 and 2008 average daily trading ranges.

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