Forex currency pairs correlations

A correlation can be positive – when the prices of two currency pairs move in the same direction – or negative, when the prices of two currency pairs move in opposite directions. Forex traders need to understand the relationship between currency pairs because they can affect a trading account’s exposure and risk. Currency pairs consist of two different currencies that are evaluated with respect to each other. Each currency belongs forex currency pairs correlations an economy, so this can affect the supply and demand for the currency.