The Best Forex Pairs to Trade in February 2025

As we enter February 2025, Forex traders are looking ahead at the key currency pairs that will offer the most potential for profit, based on economic events, market sentiment, and geopolitical factors. In this article, well explore the best Forex pairs to focus on this month, considering expected volatility, upcoming events, and fundamental market shifts.

1. EUR/USD (Euro/US Dollar)

Why Trade It in February?

The EUR/USD pair continues to be one of the most liquid and actively traded pairs in the world, and February will likely bring further volatility. A key driver for the pair in February will be economic data releases from both the European Union and the United States, including GDP and inflation figures.

• Economic Data: U.S. economic data, such as Non-Farm Payrolls and CPI, will influence the strength of the U.S. Dollar.
• ECB and Fed Policy: The European Central Bank (ECB) and the Federal Reserve are likely to maintain diverging monetary policies. The Fed's interest rate hikes and the ECBs stance on inflation will create price swings that savvy traders can capitalize on.

Best Time to Trade: During U.S. and European market overlaps, when liquidity is high.

2. GBP/USD (British Pound/US Dollar)

Why Trade It in February?

The British Pound will be closely tied to political and economic developments within the UK, including the ongoing Brexit aftermath and potential shifts in economic growth. The U.S. Dollar will also play a major role, as it reacts to global risk sentiment and U.S. monetary policy.

• Bank of England‘s Actions: Any news surrounding the Bank of England’s monetary policy stance or inflation outlook can make the GBP/USD pair move swiftly.
• U.S. Economic Data: As with EUR/USD, U.S. jobs data and inflation figures will impact the strength of the U.S. Dollar.

Best Time to Trade: London and New York session overlap, typically between 12:00-16:00 GMT.

3. AUD/USD (Australian Dollar/US Dollar)

Why Trade It in February?

The Australian Dollar is heavily influenced by global risk sentiment and commodity prices, especially those related to metals and energy, which are key exports for Australia. In February, the pair may see movement based on commodity price fluctuations, especially if Chinas economic data shows signs of strength or weakness.

• Commodity Prices: Watch for key updates on global commodity demand, especially oil, copper, and gold.
• China's Economic Data: As Australia's largest trading partner, economic data from China will significantly influence the Australian Dollar.

Best Time to Trade: During the Asian and early European market sessions, when Australia and Chinas data releases may impact the market.

4. USD/JPY (US Dollar/Japanese Yen)

Why Trade It in February?

The USD/JPY pair is traditionally a safe-haven trade, with the Japanese Yen acting as a go-to currency during times of global uncertainty. With ongoing geopolitical risks and market volatility, USD/JPY is likely to offer opportunities in February 2025.

• Global Risk Sentiment: The Yen tends to strengthen during risk-off periods, while the U.S. Dollar will react to shifts in investor sentiment.
• Bank of Japans Policy: Any statements from the Bank of Japan (BOJ) regarding its monetary easing policies or interest rate adjustments could cause major movements in this pair.

Best Time to Trade: Tokyo and New York session overlap, particularly when geopolitical developments impact market sentiment.

5. USD/CAD (US Dollar/Canadian Dollar)

Why Trade It in February?

The Canadian Dollar is closely linked to oil prices, as Canada is a major oil exporter. February 2025 could see significant price action in the USD/CAD pair, especially if oil prices move sharply due to supply disruptions, changes in demand, or global geopolitical events.

• Oil Prices: Traders should keep an eye on key events influencing the oil market, such as OPEC meetings or inventory reports.
• U.S. Economic Data: Stronger U.S. growth could push the USD higher, especially if economic reports show that inflation is still under control.

Best Time to Trade: During the U.S. and Canadian market overlap.

Conclusion

February 2025 is shaping up to be an exciting month for Forex traders, with numerous opportunities arising from global events, economic data releases, and shifts in risk sentiment. By focusing on these key pairs—EUR/USD, GBP/USD, AUD/USD, USD/JPY, USD/CAD, NZD/USD, and USD/CHF—traders can position themselves to take advantage of the volatility and opportunities the month will offer.

As always, its essential to stay up to date with market news, economic reports, and central bank decisions to inform your trading decisions and manage risk effectively. Whether you're a beginner or an experienced trader, these pairs are well worth keeping an eye on as we enter the new year.