Why is forex so volatile?

[Jason Libson]

Can you specify the actual reasons? It seems that Forex is much more volatile than other markets how come commodities moves even thousands of pips a day?

 

[Jonathan Lee]

Forex is more volatile due to high liquidity and 24-hour trading. However, commodities can move thousands of pips due to supply-demand shifts, geopolitical events, and economic reports. Leverage and contract specifications also make commodity price movements appear larger in pip terms.

 

[Fin_Trader]

The market can also be highly volatile and unstable during the publication of important fundamental news or events. For example, a central bank decision to change the interest rate can cause a sharp movement in currency prices, as investors react to such news instantly.