The most volatile major currencies in 2025

Since 2020, the world has seen many disturbances compared to a much more geopolitically stable first part of the millennium. Between COVID, new conflicts around the globe, unprecedented central bank policies, and trade wars, there is a lot to digest for economists and individuals. However, for traders, with volatility comes opportunity.

Let’s dive into major currencies that have seen the most volatility since the beginning of 2025.

The euro once again attracted significant attention from the markets. After the Trump administration decided to impose a policy of US exceptionalism on the rest of the world, European politicians showed a strong response. Particularly after a heated exchange between President Trump and Ukrainian President Volodymyr Zelenskyy, European representatives issued strong statements.¹
French President Macron, EU President of the Commission von der Leyen, and other European leaders successively spoke up and showed cohesiveness to tackle a more distant American partner. This led to a significant reversal of a six-month downtrend in the euro versus other currencies.
Germany, Europe’s largest economy, also announced a significant spending bill in March 2025, pledging €500bn to an unforeseen infrastructure plan. Markets are seeing signs of Europe’s strength with such policies, which underpin euro strength in the first part of this year.

The euro has been on an impulsive move up since the beginning of Q2 2025 and formed an ascending daily channel after its March-end consolidation.

Liberation Day led to weakness in the US dollar and underpinned the euro in April to break through prior resistance at 1.0930, which then turned into support. Prices for the EUR/USD pair soared to levels unseen since November 2021. A tweezer top bearish candlestick pattern towards the April 21 led the euro to correct back towards the low of the channel and eventually broke its support at the bottom line of the main ascending channel.

The medium term outlook still looks bullish as long as prices are maintained above the pivot zone - situated between 1.1070 and 1.1130 - zone that served to slow down the April breakout move.
For bullish continuation, look for a break above the 1.14 psychological level and a re-entry into the ascending channel.

For a further bearish reversal, look for a close below the pivot zone around 1.1050.

The yen has had quite a volatile performance in the past few years. The Bank of Japan has been stuck in a dovish stance, particularly in the past 13 years, notably with its infamous Yield Curve Control policy. Installed in 2012, this policy aimed to maintain low interest rates on their yield curve, which is made to stimulate a sluggish economy that hasn’t seen much improvement since their dominant 90s decade – particularly when it pertains to a quasi non-existent inflation, much needed for GDP growth.
This policy has led to a substantial depreciation of the yen relative to other currencies. Effectively, since the beginning of global hike cycles led by central banks, the USD/JPY has gone from 102.53 in January 2021 all the way to highs of 161.95 attained in July 2024. Since then, a more dovish stance by central banks supplemented by a weaker US dollar bolstered the yen, which is now trading around the 145 handle.
Since the start of 2025, with frantic American policies, the yen has appreciated by 7.70%, though it remains volatile.

The yen has found buying momentum after tumultuous price action. USD/JPY has been in a downtrend since the beginning of 2025 with consistent lower highs. Prices eventually corrected in March, when the downside pressure materialized on the US dollar against the JPY. These lows serve to form a daily descending channel.

April and Liberation Day also served as a support for the yen, as prices extended their moves lower to an extreme of 139.86 attained on April 21, 2025 - levels unseen since September 2024. From these prices, the yen found sellers again (buying USD/JPY) with a swift reversal all the way to the pivot zone that served as a magnet for prices. The zone is established between 147.10 and 148.50.

A move below that would imply a bearish continuation, which can be confirmed if prices enter back into the descending channel below the major support at 146.50.
On the other end, to pursue the reversal move, bulls would be looking to break and close above 148.50, looking to extend towards the major resistance at 151.20.

The greenback has had a powerful performance at the beginning of this decade. Between ever-so-strong US companies powered by record highs in most major US indices, the advent of AI technology, and an economy that has sustained one of the fastest hiking cycles in its history, the US has asserted its economic dominance.
From September 2024 to Trump’s ascension to the White House, the dollar has shown a stellar increase of close to 10% against its major counterparts. Though, as mentioned earlier, the Trump administration has scared global markets, and fears of the United States backing off from the international scene have made the dollar give back its year-end run.
After the 7th of May 2025 meeting, a more hawkish than expected Federal Reserve has stopped the bleeding from the US dollar, which gave it some strength. The markets now await further news concerning tariffs and a potential continuation of the cutting cycle in upcoming FED meetings.

Looking back at July 2024 serves a decent purpose for the dollar index. Effectively, the USD was in a bearish momentum from July to October 2024, as markets started to price in the Trump victory in the US elections, which led to a swift reversal.

The rally began with very few corrections and lasted until its inauguration speech in January 2025, with highs at 110.14. The end of the impulsive bullish move formed the head of an infamous Head and Shoulders pattern. The right shoulder was formed in March 2025, as markets feared that unprecedented tariffs would isolate the greenback – this price action sent bearish fears and led to a breakdown below a precedent pivot level at 103.250.

A further breakdown led to a swifter slump, which stopped at a measured move from the neckline, on Liberation Day at 101.27. There was a continuation of this move as the index found a bottom at 97.94 on April 21, 2025.

Since then, prices have reverted towards the last pivot at 101.750.

The trend is now unclear as prices are close to precedent confluence zones.

A further continuation of this bullish reversal in the DXY points at the next resistance of 103.25.

For a resumption of the downtrend, bears would look to break below the psychological level of 100.00 and the ascending trendline formed in the reversal.

The British pound has a case of its own. After a strong hiking cycle, similar to other central banks in the US and the EU, economic activity has remained fairly strong. The Bank of England has been reluctant to cut interest rates due to a mix of factors, including persistent inflation (particularly in the services sector).

This gave the pound a fundamental advantage relative to the euro, for example, where stronger interest rates allow for a better yield and supports currency strength. Furthermore, the UK Prime Minister Keir Starmer has maintained particularly strong relations with President Trump, which has allowed to limit overall tariff uncertainty and lead to the conclusion of a US-UK Trade Deal.

The pound has been holding firm against the greenback and its other major counterparts. Particularly since 2025, cable has been in a rally from 1.2098 all the way to 1.3440, highs attained in the last days of April, where a tentative breakout was found with a slight reversal.

Since the end of April, prices have been consolidating towards the highs of the daily ascending daily channel and remain not more than 2000 pips from the highs, a minimal correction relative to moves in other currencies.

A small daily head and shoulders pattern can be identified, though it would need a break below the psychological level of 1.32. Bears can then look towards the 1.30 level and its confluence with the bottom of the ascending channel.

On the other hand, bulls would be looking for a push towards the highs of the channel which also coincide with the April 2025 highs - further confirmation as long as prices do not fall below the pivot level of 1.32.

The Loonie has had a rough year-over-year performance. From March 2022 to July 2023, the Bank of Canada engaged in a hiking cycle that was even faster than the one made by its historic trade partner and neighbor due to exceptionally strong inflation. In 2024, the more cyclical Canadian economy was affected by higher rates, lower energy prices, and political turmoil, sending the Canadian economy into a slump that has accelerated its cutting cycle – resulting in signs of a significantly weaker Canadian dollar. USD/CAD went from 1.31 in January 2024 to a spike of 1.47 in February 2025.
On a year-to-date perspective, though, the CAD has recovered from its weakness in February when fears of record US tariffs were announced. Factually, US and Canada trade tensions increased notably, with the US president calling its northern neighbor “the 51st State”² and menaces of +100% rises in energy tariffs were announced by Canadian counterparts.
Recently elected Prime Minister Mark Carney has engaged in discussions relating to tariffs, immigration, and other key subjects with the United States, which remain Canada’s most strategic partner.³ This has reduced uncertainty and volatility in the pair. Furthermore, the new Canadian Prime Minister was once head of both the Bank of England and the Bank of Canada, which may have contributed to some strength in the CAD.

USD/CAD has been volatile in the past year, to say the least. Similar to the move seen in the DXY, the pair has seen a relentless rally with few corrections. The rally found its base after a double bottom in October 2024. Prices moved from 1.3445 to 1.4650, where they consolidated in a 2000 pip range between December 2024 and February 2025.

As explained earlier, fears of record-high tariffs led to a massive gap in the loonie on February 3, 2025, where it found some relief. Prices moved towards 1.41650 and formed a more volatile range, as prices eventually broke support after Liberation Day.

Since the beginning of April, the Canadian dollar found buyers (sellers of USD/CAD), though prices consolidated towards the most recent pivot of 1.37800 and saw a 2000 pip reversal.

Canadian dollar aficionados would now be looking for a fall to the lows established by the pivot, with continuation on a breakout on the downside.

However, a break above the key 1.4000 medium-term psychological level may see the resurgence of USD/CAD bulls for the next resistance to come in at 1.4155.

2025 has been a rollercoaster year for financial markets. President Trump and his infamous tariff policies concern economic players, as reviewing supply chains creates swift changes in monetary flows.

Q1 of 2025 was a test of strength for currencies that were mostly weaker against the US dollar in previous years. The theme of US economic activity being stronger than the rest of the world is one of the past. Markets are now looking forward to who might be the winners of these trade wars.

Footnotes

¹ https://www.euronews.com/2025/02/28/after-zelenskyy-and-trump-argue-eu-leaders-voice-their-full-support-for-ukraine

² https://thehill.com/homenews/administration/5267087-trump-trolling-canada-51st-state/

³ https://globalnews.ca/news/11172734/donald-trump-tariffs-canada-relationship-carney-ambassasdor-hoekstra/