# Currency correlation: why EUR/USD and GBP/USD often move together

> Pairs that share a currency or an economic driver tend to move in step. How correlation works, why it changes and how it can quietly double your risk.

- Canonical URL: https://forextradingcommunity.com/news/currency-correlation-explained/
- Type: Guide
- Published: 2026-09-14
- Updated: 2026-09-14
- Publisher: Forex Trading Community (https://forextradingcommunity.com), FTC Editorial Team
- Currencies: EUR, GBP, USD, CHF, AUD, NZD

Currency pairs don't move independently. Pairs that share a currency, or that respond to the same economic forces, often rise and fall together. Ignoring that is one of the most common ways traders take on more risk than they realise.

## Measuring correlation

Correlation is measured with a coefficient between **−1 and +1**:

- **+1:** the two pairs move in exactly the same direction.
- **0:** no consistent relationship.
- **−1:** they move in exactly opposite directions.

Traders usually calculate it over a rolling window, such as the last 50 daily closes, because the relationship changes over time.

## Pairs that are often positively correlated

- **EUR/USD and GBP/USD:** both have the dollar as the quote currency, and the euro and pound respond to similar European conditions.
- **AUD/USD and NZD/USD:** two commodity-linked economies with close trade ties.

## Pairs that are often negatively correlated

- **EUR/USD and USD/CHF:** the dollar is on opposite sides of the two pairs.
- **USD/CAD and oil prices:** higher oil tends to strengthen the Canadian dollar, which pushes USD/CAD down; see [oil and the Canadian dollar](/news/oil-prices-and-the-canadian-dollar/).

## Why correlation changes

Correlations are not constant. They shift when:

- One country's central bank changes course while the other doesn't
- A political or economic shock hits one economy
- Market mood swings between risk-on and risk-off

A correlation that held for a year can fade within weeks, so check it against recent data rather than relying on rules of thumb.

## What it means for risk

If you buy EUR/USD and GBP/USD at the same time, you effectively hold one larger position against the dollar. If each trade risks 1% of your account, a strong dollar move can hit both stops, turning 1% risk into close to 2%.

Opening EUR/USD long and USD/CHF long, on the other hand, may largely cancel out, leaving you paying two sets of costs for very little net exposure.

Count correlated positions together when you [size positions](/news/position-sizing-and-risk-per-trade/), and watch [live prices](/markets/) for the pairs you hold.

## Common questions

### Which currency pairs are positively correlated?

EUR/USD and GBP/USD, and AUD/USD and NZD/USD, often move in the same direction, although correlations change over time.

### Why does correlation matter for risk management?

Holding highly correlated positions is similar to holding one bigger position. A single move can hit several stops at once and multiply the loss.

---

This article is for information only and is not financial advice. Trading forex and CFDs carries a high risk of losing money.