How pairs move together

So far you have met each pair on its own. Your account does not see them that way. Buy EUR/USD, buy GBP/USD and sell USD/CHF, and you have made roughly one trade against the dollar, three times over.

One dollar, many pairs

Typical correlation between pairs

	EUR/USD	GBP/USD	AUD/USD	USD/JPY	USD/CHF	USD/CAD
EUR/USD
GBP/USD
AUD/USD
USD/JPY
USD/CHF
USD/CAD

Tap any cell to see what that correlation means for two open positions.

How many times are you really betting on the dollar?

Illustrative long-run tendencies between six major pairs, not live data. Tap a cell to read it, then tick positions in the counter to see your real dollar exposure.

Every currency pair on the grid contains the US dollar. That shared currency is why the pairs tend to move together. Correlation measures how closely: +1 means always together, −1 always opposite, 0 no link.

Read the colours. Green cells are pairs with the dollar on the same side: EUR/USD and GBP/USD often move together (about +0.85 in this illustrative grid). Red cells are pairs with the dollar on opposite sides: when the dollar strengthens, EUR/USD tends to fall while USD/CHF tends to rise, so they typically mirror each other (about −0.90 here).

Now tick Buy EUR/USD, Buy GBP/USD and Sell USD/JPY in the counter. Three pairs, three different partner currencies, but all three are short the dollar.

Tendencies, not rules

The numbers on the grid are a summary of the past, not a property of the pairs. They drift for two common reasons.

One currency gets its own story. A surprise from the Bank of England can move GBP/USD while EUR/USD barely reacts, and the link weakens for a while.
A panic. In a risk-off rush, traders often treat everything as a dollar or safe-haven decision, and links between dollar pairs tend to tighten. That is when you most need your trades to be independent, and when they often are not.

Shared drivers matter too. AUD/USD and NZD/USD usually move closely because both are commodity currencies, not only because they share the dollar. USD/JPY tends to have a weaker link to the others, because the yen has strong drivers of its own.

So treat any reading as a tendency to check. A safer default: if two trades share a currency on the same side, count them together, whatever the table says.

Count currencies, not trades

You do not need a correlation number to see what you are betting on. Split every trade into its two currencies. Buying a pair makes you long the base currency and short the quote currency; selling does the reverse. Then add up how many times each currency appears on the same side.

The practical rule has two limits. Your normal risk per trade, plus a cap on total risk to any one currency, often around 1.5–2% of the account. Trades that share a currency are sized as a group to fit inside that cap. The correlation risk lesson adds a third limit on total open risk.

Example: three trades, one dollar bet ($4,000 account)

Rule: risk 1% per trade. 1% of $4,000 = $40 at each stop.
Open trades, each sized to lose $40 at its stop:

Trade	Long	Short	Risk at stop
Buy EUR/USD	EUR	USD	$40
Buy GBP/USD	GBP	USD	$40
Sell USD/CHF	CHF	USD	$40
Count	EUR, GBP, CHF once each	USD three times	$120

What the trader believes: three separate 1% bets, so a bad day costs $40.
What can happen: one strong US data release lifts the dollar and all three stops are hit together. $40 + $40 + $40 = $120, and $120 ÷ $4,000 = 3% of the account, from one idea.
With a 2% cap on any one currency ($80), the group fits if each trade risks 0.5%: 3 × $20 = $60, or 1.5%. The same three views, with half the combined risk.

Losses can also exceed the planned figure if the market gaps past a stop, so the cap is a ceiling for planning, not a promise.

Try it

Before you add a trade

0 of 6

Write the new trade as two currencies: which one am I long, which one am I short?
Write every open trade the same way.
Count how many times each currency appears on the same side, including the new trade.
Add up the risk at the stops for the currency that appears most. Is it within my per-currency cap?
Is my total open risk across all trades still within my overall limit?
If either cap is broken: make the new trade smaller, skip it, or wait for an open trade to close.

Notice how none of the six checks needs a correlation number: counting currencies still works on the days when the coefficients have shifted.

Quick check

Question 1 of 4
You are long EUR/USD, long GBP/USD and short USD/CHF. What is your main exposure?
Question 2 of 4
A $4,000 account risks $40 on each of those three trades. A dollar rally hits all three stops. What is the loss?
Question 3 of 4
The grid shows EUR/USD and GBP/USD at about +0.85. What does that tell you?
Question 4 of 4
When do links between dollar pairs often tighten?

Go deeper: Currency correlation: how to avoid doubling your risk · Safe-haven currencies · Commodity currencies