What is it?
EUR/USD, for example, asks how many U.S. dollars one euro buys. Currency moves often reflect interest rates, inflation, trade, and central-bank policy.
← All investment types
Plain-language guide
Foreign exchange
Trade the value of one currency compared with another.
- Typical volatility
- Higher
- Often used for
- Experienced traders who understand leverage and macroeconomics
- Liquidity
- Major pairs trade nearly 24 hours on weekdays
The same money can move both ways.
Possible gain$1,000 gaining 3% becomes $1,030: a $30 gain before costs.
Possible loss$1,000 losing 3% becomes $970: a $30 loss before costs. Leverage can multiply this.
Educational watchlist
Examples to learn
These are examples—not Council picks or recommendations.
Euro / U.S. dollar
The most actively traded major pair
British pound / U.S. dollar
Often called cable
U.S. dollar / Japanese yen
Sensitive to rate differences
Before investing
What can go wrong?
- Leverage magnifies losses
- Fast reactions to economic releases
- Overnight financing and spreads
News that matters
Watch these drivers
- Central-bank meetings
- Inflation reports
- Employment data
- Trade and geopolitical events
Slow down and ask
Three useful questions
- What leverage is being used?
- Where is the stop?
- Which central-bank decision could change the trade?
Keep comparing