What causes Spreads to change?

Zalea

Newbie
Sep 15, 2020
28
2
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Spreads usually vary due to the liquidity and the upcoming economic events which causes volatility in the market. As at the time of major data releases like interest rate decisions, inflation rates, etc. volatility in the market increase, hence spreads widen.
 

Jotori

Trader
Oct 23, 2020
26
3
9
34
Next time when you see change in spreads, try to check if there were some release of important fundamentals. Usually during time of high volatility, brokers are changing spreads in order to price the risk
 

Oswald

Trader
Apr 12, 2019
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7
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33
In general, higher volatility imply higher spreads, because risk is increased during these times. Now, why volatility is changed, well, there could be many reasons, depending on a currency and general developments over it
 

Akwin

Trader
Oct 12, 2020
52
10
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Good day, after months of reading and learning , I can tell you that the spreads changes due to volatility, for example when you have a high spread this means you have high volatility or low liquidity. Don't hesitate to ask for more details. All respect to you.
 

hk_09

Banned
Oct 30, 2020
90
12
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Market volatility is the major cause, and that can happen because of any major/minor events. We traders just have tobe ready to face all of those at any time.
 

forexking

Newbie
Feb 15, 2021
28
4
3
31
Higher the volatility, higher will be the spread. Occurrence of major events across the strong economies of the world also lead to higher spread.
 

reecerispoli1

Trader
Sep 22, 2020
39
4
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28
Dear Friends,I m kind of confused to what would cause spreads to change second by second,My broker offers both the fixed and variable spreads but would trigger the variable spreads to change with time? I would appreciate any help
spreads change due to quotes from the other traders
 

no_frame

Banned
Aug 21, 2021
44
1
9
30
Market volatility influences the forex spread which then causes fluctuation. Major economic indicators also cause a currency pair to strengthen or weaken, which directly affects the spread. If the market is volatile, the currency pair becomes less liquid, and hence the spread widens.