What is What is currency correlation in forex trading? In the forex... More in forex trading?
In the, correlation is one of the most important concepts.
Correlation means that two sets of data influence each other to a certain degree, i.e. they are dependent and not statistically independent. For currency correlation, the data sets are theof two different .
The correlation is based mostly on economic dependencies and monetary policy. For example, the economies of, the and the are strongly interwoven. This means that when one of their currencies ( , and ) wins or loses against the dollar, it is likely that the other two currencies develop similarly.
Please note that because of the order of theand in the currency pairs, is negatively correlated with , even though the EUR and the CHF are positively correlated with each other.
Learn more about the correlation of currencies: