The nature of currency pairs tends to shift over time. Some move up the list, while others lose their charm and move down and sometimes out of the list. This is due to many factors, that change. Here is a ranked list of the top 5, with characteristics of every one of them for Q1 2012. Let’s start.

The most volatile currency pairs had quite a limited net movement, while the slower moving and sometimes frustrating pairs scored made bigger gains. This is how it looks:

Here are the details and 5 possible outcomes for NZD/USD.

Here are all the details, and 5 possible outcomes for NZD/USD.

The carry trade was usually done by buying AUD/JPY or NZD/JPY. The idea was to sit on a position for a long time, and enjoy the interest rate differentials. Japan has a traditionally low or non existent rate, while Australia and New Zealand had very high rates. Even after the crisis and after the cuts, this rate remains high.

While the moves are relatively slow, the pair also lost important support and is now vulnerable to more losses. Update.

These figures, and especially the unemployment claims, show that the recession might not be so close. The reaction is a risk appetite rally, which means a weaker dollar against the Canadian, Australian and New Zealand dollars.

The recent high volatility in the markets enabled us to get a better picture of the real nature of these pairs – how they behave under pressure / more extreme conditions.Here is an updated and ranked list of the 5 most predictable pairs for Q4.  The characteristics of each of these pairs is lightly different. Let’s start:

Here are all the details, and 5 possible outcomes for NZD/USD.

The credit downgrade was expected, and doesn’t reflect all the big three: Moody’s and Fitch left the perfect AAA rating unchanged. On the other hand, the downgrade is a precedent, and affects the benchmark of global bonds and money markets, that don’t have many places to go to. An immediate impact is very likely. The endless flow of big news means that after a few sessions, the effect will fade away. Let’s look at currencies, starting from the more probable outcomes, to the uncertain ones: